Home is where the heart is – make sure it’s covered!

While building or homeowner’s insurance isn’t compulsory, most banks require it when granting home loans. This type of insurance protects both the owner of the home and the bank from potential losses due to structural damage.

Roger Nicolin, one of our brokers explains that “whilst banks mandate building insurance, you’re not obligated to use the bank’s own insurance offering. You can have a policy from accredited insurers, and this is where TIB can ensure that you get real bang for buck, plus the best coverage.”

Before deciding on the best option for your needs, our TIB brokers will typically compare and consider the following factors:

• Cost
• Coverage
• Benefits
• Reputation (of insurers)
• Service levels

Choosing the Right Coverage

Insurance providers offer a wide range of options, and certain policies may better suit your specific needs. How claims are processed also varies by insurer, so it’s important to evaluate all your options to find the best fit.

Start by determining the replacement value of your property, which differs from the purchase price. The policy should cover more than just the building itself. Make sure to include the replacement costs for:

• Fixtures and fittings, such as ovens, kitchen sinks, and bathroom sanitary ware.
• Hot water systems, heat pumps, solar panels, and batteries.
• Fixed structures like decks, swimming pools, and water features.
• Paved areas of brick, concrete, asphalt, or synthetic grass.
• Boundary walls, fences, gates, and their mechanisms.

Uncommon features that should also be included in the valuation are:

• Tennis courts
• Spa baths, saunas, and related equipment
• Satellite dishes
• Borehole equipment
• Septic tanks
• Solar panels

Keeping Your Policy Up to Date

Insurance premiums typically increase annually to account for inflation and rising building costs. However, if you’ve made renovations, you must request a reassessment to ensure your coverage reflects your home’s current value. Mark Tuttle, TIB Managing Director, concludes that “this is how we make sure that you won’t have any issues when it comes to claiming. At TIB, we encourage policy reviews with our clients annually, to ensure our clients are adequately covered and to avoid gaps in coverage.”

Sources: Investopedia, Private Property, Ombudsman for Long-Term Insurance: Annual Report 2020, Allianz: Global Claims Review 2022, Stats SA: Housebreaking still number one in SA