Building insurance and home contents insurance: weighing up the differences

The need for various insurance policies is part of life. From medical aid and car insurance to life insurance policies and retirement annuities, all policies are in place to protect you in some way or another. When it comes to protecting your home, we need to talk about building insurance and home contents insurance.  

The first thing you need to know about these insurances is that they are not the same thing. Having building insurance means that the structure of your home is covered and having home contents insurance takes care of the contents of your home, such as your furniture, appliances and other valuables.

The basics of building insurance

Building insurance is often also referred to as homeowner's insurance, and it provides you with a safety net if something happens to the actual structure of your home. If your building is damaged by a flood, fire or a burst pipe, for example, then your building insurance provider will step in and help you pay for the repairs to the building. Some building insurance policies will also cover assets such as fixed generators, water tanks and swimming pools.

It's important to remember, however, that a typical building insurance policy will only cover specific incidents. Day-to-day maintenance of your home's structure is not included. In the same way that a car insurance policy will not pay for your car to be serviced, a buildings insurance policy will not pay for the day-to-day maintenance of your home.

If you are buying a house, then taking out building insurance is likely to be part of the requirements for getting your home loan approved. Buying property in a complex or block of flats may be an exception to this, because in some cases, building insurance will be taken care of by the body corporate for the building as a whole. If you are a tenant, it will be your landlord's responsibility to ensure that he or she has building insurance, because they are the owners of the building.

The peace of mind offered by household contents insurance

As the saying goes, life happens when you least expect it. A burglary, fire or flooding from a burst geyser can all result in the need to replace household appliances or furniture - often at great expense. If you have a household contents insurance policy, which tends to be extremely affordable, your insurer will be there to help in these difficult times. Unlike building insurance, household contents insurance is never a must, but insurers advise homeowners and tenants to avoid taking an "it won't happen to me" mentality. The monthly saving of not having household contents insurance may be a couple of hundred Rand, but having this policy could save you hundreds of thousands of Rand if something had to go wrong. 

A household contents insurance policy covers the contents of your home, rather than your home itself, and you therefore need this cover whether you are a homeowner or a tenant. It's important to note that items such as laptops, cell phones and jewellery, which you carry around with you, are often not automatically covered by your household insurance policy. These are seen as an additional risk, and the cost of insuring these may be higher than the cost of your household contents insurance policy. A final piece of invaluable advice about household contents insurance is that you need to have a realistic idea of what your possessions are worth, and make sure that you are neither over nor under insured.

Protecting your assets and having various insurance policies in place is a must. Before you can protect your dream home, however, you need to find it. Jawitz Properties has a huge range of homes available for sale and to rent in every corner of South Africa. Contact us for more information about finding and insuring the perfect home for you and your family.