Skip to content

Building insurance cover: Is your home adequately insured?

Building insurance cover is just as important as household contents insurance for homeowners who wish to safeguard their property in the event of a disaster.

Building Insurance Cover

Article summary

  • Building insurance is calculated according to the cost of replacing old with new.
  • Every homeowner needs to protect their property against damage in the event of disaster.
  • Get annual valuations on your home and check that you have appropriate building insurance cover.

When considering home insurance, many people might think only of covering contents and even then often underinsure because they don’t maintain up-to-date replacement values.

Building insurance is vital. It is a compulsory requirement if a property is bonded. It 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 disasters. There may be limits set for the latter, which will be specified in the contract.

Property owners need to ensure that the sum insured (replacement value) on the property is increased proportionately with current building prices,” warns Alex Bartels, National Insurance Sales Manager at ooba. “If they are underinsured at the time of claiming, the insurer will not settle the entire claim.”

Assess replacement costs This is critical for homeowners who should reevaluate building insurance cover annually as there may be a significant difference between the actual replacement cost of the building and the market value of the property.

Bartels adds that a property’s value can escalate following substantial remodelling or renovation work. “When you are making major changes to your home, it is vital to contact the insurer of your property to ensure that your coverage is still adequate. Anyone undertaking a home renovation project should therefore make sure that they have their property valued afterwards to determine whether they are insured sufficiently in the event of a claim.”

What about thatch? Premiums on a standard construction – tile, roof and brick – as opposed to a non-standard structure incorporating timber frame walls and a thatch roof will differ because of the fire risk associated with the latter. If you’re buying a home that is considered high risk because of its structure, be prepared to pay more.

Get proper valuations A building insurance policy provides cover on a “new for old” basis. Get a certified valuations company to give you an annual update on what cover you need to rebuild your home and replace all the fixtures and fittings from scratch if necessary. Then shop around for the best cover.

Update your policy Get into the habit of updating your policy annually as replacement values and construction costs traditionally increase year on year. If you are thinking of renovating, consider how that will influence your premium as well.

If you are thinking about buying a new home, remember to factor in building insurance to your monthly budget.

ooba, South Africa’s leading home loan comparison service, offers competitive and comprehensive buildings insurance, ensuring you are adequately covered.

Get a free home loan comparison

Multiple quotes from the big banks to compare.

Apply

Ranked #1 in Financial Services on Hellopeter

hello-peter
image-stars

Average rating of 4.82 from over 3 000 reviews

Simply The Best

Ooba home loans services are simply the best. My Consultant Bianca Dancer was so hands on and helpful from the get go. She guided me through the entire process and put me at ease being a first time buyer. I highly recommend their services.

Tia J

Excellent Service

Jay Govender and Maleshini Reddy from OOBA provided outstanding assistance and guidance in securing our home loan. Response times were excellent and they were professional and friendly.

Brice G

Bond Application

Estelle Vorster was really helpful in securing the best deal for my home loan, she not only negotiated a lower interest rate she went as far as securing 50% discount on the transfer costs.

Butana M