When buying a property, whether it be for investment purposes or a home to live in, it is often the biggest financial commitment an individual makes, and it is therefore very important to ensure that that investment is properly protected. The most direct way of doing this is via your insurance.
The main purpose of homeowners insurance is to financially prepare and protect an individual in the event of loss or damage to the physical structure of their property and the contents therein. This includes the permanent fixtures and fittings – such as walls, roof and flooring, as well as garages, driveways and other outdoor structures. Insurance providers usually offer various levels of protection according to the needs of the homeowner.
Property owners need to ensure that they fully understand what their policy does and does not cover, to avoid nasty surprises when disaster strikes. Often a homeowner will under-insure their property in an attempt to save on monthly costs, but when the time comes for claiming the insurers will not settle their entire claim, leaving the property owner to fund part of the repair or replacement costs out of their own pocket.
Insuring a property for less or more than it’s real market value could mean a loss either way – the market value and replacement value of the property in question go hand-in-hand and should be proportional.
When bonding a property financial institutions insist on both life insurance (to cover the bond in the event of death) and building insurance (to cover the home in the event of damage). It is often more cost-effective to shop around for competitive insurance quotes than to accept the policy the bank provides.
Regarding sectional title units; the structure is often insured by the Body Corporate and the premium included in the monthly levy. Contents insurance is then taken out by the tenant or individual occupying the property to cover their possessions within the home.
Consolidating household, vehicle and contents insurance under a single insurance provider will reduce the overall monthly cost of insurance, saving in the long run. Finding a suitable policy that caters to individual needs is best done through comprehensive quote and cover comparisons – there are numerous reputable insurance providers and many offer inclusive and additional benefits or cash-back deals with their policy packages.
Most policies will cover you for loss or damage caused by theft or attempted theft, fire, subsidence or explosion, acts of nature (floods, earthquakes, wind, storms, lightning or hail), power surges, impact by vehicles, aircrafts or falling trees and bursting geysers or pipes.
Some insurance providers will offer additional benefits and optional extras, such as temporary accommodation or covering the cost of a fire brigade callout, as well as liability coverage for people other than those of your household or domestic employees.
Familiarise yourself with what your policy covers with regards to environmental and accidental damage, and ensure that your most valuable assets are properly protected through comprehensive cover with a reputable insurer.