Unpacking Building Insurance

by Guest Blogger, Stanford Legodi

Buying a house  is probably the single biggest purchase someone will make in his or her lifetime. It stands to reason that, because life has no guarantees, this big purchase needs to be properly insured with adequate buildings cover.

We’ve compiled a list of possibly the most important questions and answers (FAQ’s) that you should  be aware of before taking out buildings cover.

How do I determine how much I will be covered for?

This depends on the value of your property. How it usually works is that your insurer will obtain the municipal valuation of your home as it currently stands. They will obtain this either from your finance provider or request it directly from you, before they can work out how much your premiums will cost. In short, the value of your property will determine the premium that is payable and the amount that you will be covered for.

I am in the process of buying a house; do I need to have buildings insurance?

If you’re buying a new house cash then it’s not a pre-requisite to have buildings insurance. However, when you’re buying a house that is financed by a bond provider, then you are required, sometimes as a condition to your bond approval, to take out buildings insurance. This is so that your finance provider can protect their investment.

What’s the difference between buildings insurance and home contents insurance?

Buildings insurance covers your buildings and all permanently fixed structures that are attached to your house and that form the immovable part of your home. That is to say the walls, foundation slabs, tiles, fixed bathroom and kitchen cabinets, sinks, baths and sometimes this can include external TV aerials and satellites which are fixed. Another way to look at it is if you were to move house all the items which you can’t move and are attached to the property will be covered by buildings insurance.

While home contents cover will cover all the items that are movable within the home. Items such as your fridge, bed, curtains, chairs, TVs and radios, carpets and even outdoor furniture are items which should fall under this cover.

What is the importance of buildings insurance?

Buildings insurance is there to protect you against any number of natural disasters and eventualities that might occur. For example, if it were to hail tomorrow and your windows were damaged in the process. You can lodge a claim from your insurer to have your windows replaced and your damaged roof fixed. Another scenario is if your geyser is located in your ceiling and it bursts, the water dripping from it, could ruin your ceiling and your walls. Instead of wrecking your mind, worrying about how you are going to repair the damage, buildings cover could ensure that you can get these fixed without the hassle of having to pay for the repair work yourself.

What does building insurance cover?

Buildings insurance covers the walls, foundation structures and the property, plus fixtures which are attached to the walls such as baths, fitted kitchens etc. If it cannot be moved or it came attached to the house then it is a part of buildings insurance.  If it can be moved, then it is part of “contents” and it will not be covered by buildings cover. Buildings cover also includes outbuildings – garages, garden sheds, tennis courts and swimming pools etc.

Will my buildings insurance also cover my geyser?

In most instances no. A geyser, although technically attached to the house, is considered an appliance, and therefore it isn’t covered under normal buildings cover. However, most insurance providers will give you the option of including it as an extra with an additional premium attached thereto. It is advisable that you cover it especially if you are buying a house that is older than ten years.

Will my thatched roof be covered?

Yes, insurers do cover homes with thatched roofs. However to get cover, most insurers will insist on an SABS approved lightning conductor certificate before they proceed. Some insurers do not require you to have this certificate as a pre-requisite to being covered, but they could charge you an increased premium for the risk that they are taking. Remember to be as accurate as possible if you do not want to lose out on your claim.

What will happen if I am under-insured?

If you’re under insured and you want to claim, you will unfortunately not be able to get the full value of your claim. Being under insured will only result in you losing out and getting back money that may not be able to cover you for the full repairs to your property.  It is essential that you do not under- insure your home.

Can I combine buildings cover with home contents and car insurance?

Yes, you can combine your buildings cover with your home contents as well as car cover,  provided your insurer offers all three of these types of covers. In some instances the insurer could offer you a discount for taking out all three types of cover under them.

Remember the onus to take out insurance lies with you. No one, except maybe for your bond provider, can force you to have buildings insurance. However, by having cover you’ll always have peace of mind that should anything happen to your property you will be able to get your home back to what it was.

Disclaimer: The information provided in this article is for informational purposes only and do not constitute legal or other professional advice. Hippo Comparative Services (Pty) Ltd does not accept any responsibility for any act, omission, loss, damage or the consequences thereof by the dependence by any person upon the contents of the article. Hippo Comparative Services is an authorised financial services provider. (FSP Number: 16357)

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