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Lower your home insurance: The factors that impact your premium

It’s a good idea to shop around to find the best cover as there are various factors that will affect premiums.

Lower Home Insurance

Article summary

  • When you are a homeowner, home and building insurance are essential to ensure that your prized possessions are protected and covered for their full replacement value.
  • If you are on a tight budget buy a home in a good location with a low crime rate, which will help keep home insurance premiums down.
  • Update your home insurance annually.

As a homeowner, part of your monthly budget should comprise buildings and household insurance, which covers the actual structure of your home as well as home contents. In order to get a fair idea of cost, you should have up-to-date valuations on your current or potential home as well as your household goods and personal possessions before you request quotes. This will save you a lot of time and trouble later on.

What buildings insurance covers

Buildings or homeowners’ insurance covers the structure of your property against insurable events such as fire, flood, lightning, wind, etc. It does not cover damage to your personal belongings inside or outside your home, such as clothing, furniture and electronic equipment. These would need to be covered under your household contents insurance.

What insurers want

Insurance providers will look at the structure of your property, the location, and the replacement cost of the property when calculating a quote. For example, a thatched roof will attract a higher premium than a tiled roof because of the inherent fire hazard. And insurance for a primary residence will be lower than a holiday home because the latter is occupied infrequently.

Compare insurance quotes

It’s a good idea to shop around to find the best cover as there are various factors that will affect premiums. Practically, location and security are two of the top influencers – choose wisely and that choice should reflect in lower premiums. If you are buying in an area where crime statistics are high, for example, your premium will be high too.

Customised policies

Your quotes should be calculated based on the information you supply towards replacing your entire home as new (not market value) so it’s best to have all the current valuations on hand when you request them. A home in Constantia might have a higher market value than a Victorian cottage in Observatory but the replacement value of the latter may be more because of the cost of materials and workmanship needed to rebuild.

Renovations and remodelling

Alex Bartels, National Manager of Insurance Sales at ooba, South Africa’s leading bond origination company, says the value of a home can increase significantly following extensive remodelling or renovation work. “When you are carrying out any serious work to your home it is vital to contact the insurer of your property to ensure that your coverage is still correct. Anyone undertaking a home renovation project should therefore make sure that they have their property valued afterwards to determine whether their insurance policy is still adequate in the event of needing to make a claim.”

Policy updates

Most insurers will have automatic increases in replacement value every year and this will be communicated to you. This may or may not be in line with your specific needs, so always ensure you review carefully. Being underinsured when you have a claim can be a big problem.

Consider using an insurance broker to help you source the best premiums to suit your needs or request quotes online. Consider asking a broker for advice – they will be able to scrutinize the policy, and will understand the insurance ‘speak’ many of us don’t fully comprehend.

ooba, South Africa’s leading home loan comparison service, offers a range of competitive and comprehensive insurance products designed to protect you, your home and its contents. Find out more about our buildings insurance, home loan insurance and household contents and vehicle insurance today.

How much can you afford?

Calculate the home loan you are likely to qualify for and how much you can expect to pay monthly on your bond repayments.



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VAT Increase Disclaimer

Effective 1 April 2018, by order of National Treasury, Value-Added Tax (VAT) will increase from 14% to 15%.

Please note that this increase will retroactively effect VAT-inclusive calculations in articles contained in our website.