Home insurance is two different policies
The building and everything in it are covered separately, and people insure one and assume they have both. What each one actually pays for, why underinsuring is the expensive mistake, and what is never covered no matter what you pay.
What you can actually buy
Start here. Choosing the wrong level is a more expensive mistake than paying slightly too much for the right one.
Buildings cover
Covers the structure.The structure itself: walls, roof, fixed fittings, usually the boundary wall and the pool. It pays to rebuild, not what you bought the house for and not what an estate agent would sell it for. If you have a bond, your bank requires this.
Contents cover
Covers your things.Everything you would take with you if you moved. Furniture, appliances, clothes, linen, food in the freezer. Priced on what it would cost to replace all of it new, which is almost always more than people guess.
All risks
Items you carry out of the house: a phone, a laptop, a handbag, jewellery, a bicycle. Contents cover usually stops at the front door, so without this, a phone stolen at a shopping centre is not covered.
What catches people out
None of this is hidden. It is all in the wording nobody reads until the day they need it.
Underinsurance and the average clause
If you insure for half what it would cost to replace everything, the insurer can pay half of any claim, not just cap it at your sum insured. A small claim on an underinsured policy gets cut too, which is the part that surprises people.
Single item limits
Contents policies cap what they pay for any one item unless it is specified separately. An engagement ring or a good laptop is often worth more than the cap, so it needs listing by name.
Wear, tear and maintenance
Insurance covers sudden and unforeseen events. A roof that has been leaking for two years, damp, rust and gradual deterioration are maintenance, and they are excluded everywhere.
Security requirements
If your policy says burglar bars, an alarm or a linked armed response, and they were not there or not switched on, a theft claim can be declined.
Power surge and lightning
Often a separate limit rather than part of your main contents cover, and in a country with this much load shedding it is worth checking rather than assuming.
What moves the price
Some of this you can change and some you cannot. Knowing which is which is most of the negotiation.
- 01
Where the property is
Suburb-level crime, flood and storm history. The same house costs different amounts to insure in different streets.
- 02
What it is built of
A thatch roof is priced completely differently to tile, and some insurers will not quote on thatch at all.
- 03
Security
Alarm linked to armed response, electric fence, access-controlled estate. These genuinely move the price on contents.
- 04
The sum insured
The amount you ask to be covered for. Guessing low to save on the premium is the most expensive saving in insurance.
- 05
Your excess
Same trade as anywhere else. More of the claim on you, less on the monthly bill.
What to ask before you sign
Ask these, and get the answers in writing. A good insurer will answer all of them without hesitating.
- 1Am I covered for buildings, contents, or both?
- 2How was my sum insured worked out, and when was it last reviewed?
- 3What happens if I am underinsured when I claim?
- 4What is the limit for any single item, and what should I specify by name?
- 5Are my phone and laptop covered away from the house?
- 6What security do I have to have in place for a theft claim to pay?
Questions people ask
- Is home insurance compulsory in South Africa?
- Buildings cover is required by your bank if you have a bond, and it is often bundled into the bond account. Contents cover is entirely optional, which is why many people with a bond discover they have buildings cover only.
- How much contents cover do I need?
- Enough to replace everything you own at today's prices, not what you paid. The usual way to work it out is to walk through the house room by room and list what it would cost to buy each thing new. Most people come out well above their first guess.
- Does home insurance cover load shedding damage?
- Power surge damage is often covered but frequently sits under a separate limit, and some policies require a surge protection device to be fitted. Check the wording rather than assuming, because this is one of the most common claims in South Africa.
Work it out yourself first
Ready to see what it costs?
Tell us once, and you choose which insurers get your details. No cold calls from anyone you did not pick.