It’s a good idea to review your insurance provisions from time to time and make sure you have the correct cover for your home and any other properties you own.
“As a priority, you need a policy that protects you in the event of damage to your home by storms, fire, flooding or any other major disaster. This is called homeowner’s insurance and is essential even if your home is not bonded, or you could find yourself having to meet substantial repair bills or rebuilding costs out of your own pocket,” says Harcourts Africa CEO Martin Schultheiss.
“Even worse, if your property is bonded and you don’t have the proper insurance, you could end up without a home but still owing the bank the outstanding amount on your home loan.”
When deciding how much insurance to take out, he says, you should bear in mind that building costs go up every year, so you need to insure your property at the current replacement value and not at the price for which you bought it or even the current market value. As an indication, the difference in price between newly-built homes and similar pre-owned homes is about 15% to 20% at the moment.
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