22% of respondents to a new online poll conducted by ooba, South Africa's leading bond origination company, say they have no household insurance cover, while 14% say they have cut back on coverage in order to pay lower premiums, as last year¿s recession continues to impact on consumers. Only 3% said they have increased their coverage.

"These numbers are concerning," says Craig Deats, Executive Director: Sales and Distribution at ooba. "While it is understandable that people are looking for ways to reduce monthly expenditure, given the recession South Africa has experienced, this is one of the last areas where people should be looking to cut corners.

Deats says that the recent rate cut should provide some light financial relief for consumers and is an opportune time to review their finances.

"Insurance is one of those payments that people tend to make begrudgingly, but with such a high rate of household burglaries in South Africa it is an essential purchase." Official statistics released last year by SAPS for the 2008/09 financial year revealed that there was a 27.3% increase in household robberies on the previous year.

According to the ooba poll, 19% of respondents say they have spoken to a financial advisor to see whether there is a way of reducing household insurance costs without cutting benefits. Deats says this figure is quite encouraging and advises people who are struggling financially to follow this route rather than automatically deciding to cancel or reduce cover. Deats says people will be surprised at how much they can reduce their monthly premiums by shopping around and tailoring solutions to best suit their particular needs.

"When times are tough and people are struggling to make ends meet, insurance is often one of the first costs to be cut but one should really think twice before cancelling any existing policies as the consequences if something does happen can be extremely severe for family and dependants."

ooba (formerly MortgageSA) has rebranded its insurance offerings ooba Buildings Protector and ooba Bond Protector in keeping with the company's name change earlier this year.

"We have renamed the insurance offering as a whole the 'ooba Protector Range' " said Craig Deats, Insurance Managing Executive at ooba.

ooba Buildings Protector, previously known as Buildings Insurance (BI) and ooba Bond Protector, previously Mortgage Protection Plan (MPP) are the two insurance products offered within the ooba Protector Range.

"We felt that it is important to align our products with the rebranding of the company from MortgageSA to ooba," says Deats. "The name ooba is a differentiator in an industry that has become cluttered with generic names."

The bond originator rebranded in February this year. As well as being the biggest bond origination company in South Africa ooba also offers insurance, an online property search engine and have recently introduced a credit card.

"ooba Protector Range offers both building and bond protection to cover key home owner insurance needs," says Deats.

"Due to changes in legislation, you now have freedom of choice to obtain Buildings Insurance cover from any accredited insurer," Deats points out. "The ooba Buildings Protector protects your home from costly damage that could be caused by unforeseen circumstances and gives you comprehensive cover at highly competitive rates."

The ooba Bond Protector, previously known as the MPP, is designed to provide bondholders with comprehensive cover in the event of death, disability, a dread disease or retrenchment.

Declining house prices and rapidly increasing building costs are creating a very real gap between the market value of properties and their replacement costs. Property owners need to reevaluate their buildings insurance to guarantee that they are sufficiently covered in the event of a disaster.

"Property owners need to ensure that the sum insured (replacement value) on the property is increased proportionately with current building prices," warns Craig Deats, Insurance Managing Executive at ooba. "If they are under-insured at the time of claiming, they will find that the insurer will not settle the entire claim."

While the property market has devalued in the last few months building costs, the cost of building materials and the cost of labour, have been climbing steadily. Key contributors to rising building costs are steel, cement, copper and the impact of rising oil prices.

Statistics from the Bureau for Economic Research Building Cost Index show an average building increase of 15% for 2007 with the last quarter 2007 at 16.5% and the first quarter of 2008 at 21.9%.

"There is a sharp increase in building costs mainly due to a low base rate increase in Q1 2007 and rises in input costs of builders," says Deats.

"For buildings insurance, you need enough cover to rebuild your home and replace all the fixtures and fittings within the home from scratch and the BI policy provides cover on a 'new for old' basis" says Deats.

Buildings insurance is a requirement if the property is bonded and protects the actual building structure and all the permanent fixtures and fittings, garages, swimming pool, paving and walls in the event of fire, floods, lightning and other unforeseen causes.

"The cost of building materials and the cost of building labour changes on an ongoing basis so it is necessary to reevaluate your building insurance on an annual basis to ensure that, in the event of a disaster, the full value of replacing your property is covered," notes Deats.

For an accurate replacement cost of the buildings, property owners should be requesting a replacement cost valuation from a certified valuations company. The property owner¿s insurer should be able to recommend one.

A client can speak to their Property Finance Consultant when applying for a bond and they will be able to assist them with all their building insurance needs.

"It is critical for home owners to take a look and reevaluate their buildings insurance today as there may be a significant difference between the actual replacement cost of the building and the market value of your property," concludes Deats.

It is common perception that trusts are only for the very wealthy, but many property owners could benefit from placing their property into a trust and protect one of their most valuable assets as well as future income of their family.

"While giving up ownership of your property may appear to be a scary concept a trust ensures that the property is well out of the clutches of creditors as it is the only entity that benefits from total asset protection," says Ian McDonald national manager of financial planning at ooba (formerly MortgageSA).

"The property owner can still enjoy the benefits of the property such as rental income or as a residential home but without the risk.

"Another major benefit, and one of the main reasons for setting up a trust is that the property no longer falls into your personal estate and the property is not subject to inheritance tax," states McDonald.

"The ownership and benefits are passed onto your family quickly and without complex tax issues."

In South Africa, minors are not allowed to inherit any assets therefore a trust protects your children if something should happen. The trustees will administer the assets in the trust until such time as the beneficiaries reach a certain age, in South Africa this is usually 25 years old.

It also does away with the need for an estate executor. An executor is entitled to a maximum of 3,5% plus VAT of the estate¿s value and is responsible for winding up and administration of a decreased estate, taking control of assets, settling liabilities and distributing the net assets in terms of the will.

But, trust's are not without complications and potential problems with trustees and high tax rates need to be carefully considered.

"Property owners need to be aware that they are transferring the control of the property out of their direct control," cautions McDonald. ¿The most typical problem with trusts is when the relationship between the founder and trustee goes sour, this can happen during divorce or other family disputes."

Disputes such as these can result in the beneficiaries not having access to the income or benefits.

"The founder needs to carefully choose the trustees and weigh up the chances of any disputes against the other benefits of the trust and consider carefully whether a trust is the best vehicle," says McDonald.

"Also, another potential disincentive is that the transfer duty when a trust acquires an immovable property is higher than an individual¿s rate, at a rate of 8%," states McDonald.

Since 1991 trusts are subject to taxation. Income not distributed to beneficiaries is taxed at a flat rate of 40%.

"Another potential deterrent when considering forming a trust is that they attract the highest capital gains tax," says McDonald. "50% of all profits on sale of trust assets are included in the trust's taxable income and taxed at the rate of 40%, resulting in a net capital gains tax cost of 20% of the capital gain."

Once deciding that a trust is the best vehicle for your property the founder will need to draw up a trust Deed that clearly defines the trust's objectives and beneficiaries and register it with the Master of the High Court.

"The Master will require full details, ID and banking details of the trustees and then the Master will decided whether security needs to be furnished by the trustees or not."

The trustees will only be allowed to act as trustees if authorised in writing by the Master of the High Court and the beneficiaries must be clearly outlined.

All South African property owners are entitled to place their assets in a trust ensuring the property is entirely protected from the grasp of creditors and benefiting the property owner's family in the event of their death. But, property owners need to be aware of the potential shortfalls when creating a trust which can include disagreements between the trustees and high rates of taxation.