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6 Things People Get Wrong About Buildings Insurance

Aug 21, 2023 | Property

We can’t stress this enough. Buildings insurance is an absolute essential expense for home owners in South Africa. This type of financial product isn’t just a formality when you take out a home loan – it also provides necessary financial protection against damage or loss of property due to incidents that happen more often than not, such as theft, fire, or natural disasters.

The thing is, there tends to be several misconceptions about buildings insurance in South Africa. So much so, that a worrying number of people are making important decisions around how to cover their properties and belongings based on faulty information.

To help you make an accurate and informed decision, let’s unpack the most common misconceptions around getting buildings insurance.

Buildings Insurance Covers Everything

Buildings insurance covers the physical structure of your home and outbuildings. This typically includes electronic operated motor gates, palisades, geyser, pavements, and retaining walls. That said, it’s important to make sure that you check your specific policy documents to confirm what is and isn’t covered.

Most of the time, people assume that buildings insurance covers what’s in your home, too, and get quite a shock when they claim for the theft of their expensive smart TVs… only to discover that their household belongings aren’t included with this type of policy and that they’ve been exposed to a lot of risk the whole time.

Buildings Insurance Is A Legal Requirement

The truth is that most financial institutions will require you to have buildings insurance as part of the home loan contract that you get with them. However, it’s not a legal requirement in South Africa to have buildings insurance as a homeowner. Having said this, we strongly advise that all home owners have buildings insurance to make sure that no unexpected damage or loss causes financial strain on you and your family.

Renters Are Covered By The Landlord’s Home Insurance

Many renters believe that they are covered by their landlord’s home insurance and don’t consider getting their own policy. There is some truth to this misconception, in that your landlord’s insurance may cover the physical structure of the building you live in. The thing is, this policy won’t cover your personal belongings. As a renter, you should look at getting your own home contents insurance to protect your personal belongings from damage and theft.

The Bank Provides Buildings Insurance With Your Home Loan

Now, just because your bank requires you to have buildings insurance as part of your home loan agreement, doesn’t mean that you have to get this cover from the bank. You’re more than welcome to explore other insurance providers and potentially achieve significant savings on your insurance premiums.

Renovations Don’t Affect Buildings Insurance

Many buildings believe that renovations don’t affect their home insurance. This simply isn’t true. Renovations can impact the value of the property and the level of cover needed, which is why it’s so important to inform your insurance provider of any renovations to ensure that your still have the appropriate level of cover. It’s also a good to know which renovations add value to your home and which don’t.

Insurance Is Outrageously Expensive

Many people believe that insurance is outrageously costly and that they are unable to afford it. However, the cost of buildings insurance can vary depending on several factors, including the value of the property and the insurance provider you go with.

The key is to shop around and compare quotes from different insurance providers in order to find the most affordable premium from a reputable insurer.

Hopefully these insights will shed light on the more common misunderstandings on this all-important financial product. Ultimately, understanding the options available to you and shopping around for the best rates will help you find the right level of protection at a competitive price.

Looking to find quotes to compare right now? Visit AA Financial Services and you’ll see for yourself just how much you could save on your buildings insurance today.

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