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For South African citizens on the property ladder, it is not compulsory or a legal requirement to have home insurance. However, in the case of an unlikely accident, either human or natural, having something to cover the expense may save you lots of cash in the long run. Continue reading, where we uncover more about the role of home insurance.

For most homeowners, insurance is split in to two main categories, both of which are recommended. These groups are buildings insurance and contents insurance. Building insurance covers damage to building structures. Contents insurance (or Household Content Insurance) protects you against impairment to items inside the home including furniture and appliances. Although these items may never be involved in an incident, there is always that small opportunity of a flood, earthquake, or fire occurring that can leave you in trouble.

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So, if you do opt for insuring your home, payment is normally necessary in one large sum at the beginning of the year or else spread out into monthly amounts. Your premium sum is decided depending on where your house is located, how liable it is to damage, the size of your house and your past reputation as a home owner.

For example, potential insurers are probably going to be more dubious about offering a low premium to a home owner living in a high-risk area, such as in an earthquake or flood zone, in contrast to the owner of a safer, sturdier building in a well-policed and kept location. Basically, your overall premium is lower if the chances of the company having to pay repair fees are lower.

As a South African homeowner, it is a good idea to take care of your home and only claim on the insurance when it is necessary to do so. By being sensible with equipment, especially electronics and cooking utensils, you are more likely to reduce your premiums in the future.  For example, although most insurance companies will cover the damage costs of a house fire caused by a chip pan that was accidentally left unattended, your premium will be raised later on as you are considered more prone to incidents.

If you do make a claim, often an independent assessor will visit your home or at least access the details of the incident in depth before finalising payments. If the assessor can prove that the damage was purposeful and not simply accidental or out of the control of the home owner, then it is possible for the insured person to still have to pay for the damage themselves.

In short, having your home insured can be a useful tactic of saving money over a long-term period, but can equally mean that you are losing cash when accidents do occur. As the old saying goes: ‘it is better to be safe than sorry’, and perhaps it is worth taking cover just in case risks become harsh realities. It's a better idea to have to allocate some money now to Insurance, then having to fork out money which you may not have in the future.

Futher Reading: Making a Home Contents List.


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