What homeowners insurance is:
Homeowners insurance is usually divided into types of insurance:
Home Insurance, also known as buildings insurance, will cover the actual building, the structure and permanent fixtures.
Household contents insurance will cover moveable possessions in the home. This may include furniture and electrical appliances.
Why do you need homeowners insurance?
As someone who owns a home you are automatically open to various risks that may threaten you financial stability.
Having this type of insurance cover can help you to protect yourself from potential risks, such as:
- Fire damage
- Water damage
- Water damage due to a burst geyser
In South Africa, most standard policies cover damage caused by storm, flood, wind, water, hail or snow.
It protects you against sudden and unforeseen losses. You may not necessarily have the finances to be able to deal with a financial emergency. This is why having homeowners insurance can be so helpful. You have the peace of mind knowing that you are covered and won’t be left with large bills to pay.
Insurance is an individualised product so you need to get the right type of cover to suit your unique individual needs. The type of homeowners insurance that you get will be unique to your needs and will be determined by unique individual factors.
If you are financing your new home through the bank or another financial institution you may be required to get homeowners insurance. While home contents cover may not be essential, you will have to get comprehensive buildings insurance cover. This is because the bank will want to protect its asset.
If you don’t have this cover and you are still paying off your furniture or appliances this means that you will be saddled with even more debt. By getting homeowners insurance you are protecting yourself from any incidents that may threaten your financial stability.