Ins and outs of building insurance

Homeowners or building insurance covers damage or destruction of the physical structure of your home. It includes improvements or renovations, as well as a range of insured risks, such as damage to geysers from break-ins, water, fire and more.

It covers permanent structures on your property, including your home and outbuildings, as well as permanent fixtures, fittings, walls, patios and gate motors. The policy covers the cost of replacing your assets. In addition, it may also cover the cost of a hotel stay and other living expenses while your home is being restored or while you find a new place to live.

Your obligations

A homeowners policy is a contract between the homeowner and the insurer, in terms of which the insurer agrees to pay the homeowner an agreed sum in the event of damage to or destruction of the insured property.

On the other hand, the homeowner has to meet certain obligations in terms of the policy to avoid having any claims rejected.

For example, suppose your home suffers fire damage. In that case, your insurer may deny your claim for damages if you don’t have valid certificates of compliance for your property’s electricity and gas installations.

All policies specify exclusions and obligations. To avoid surprises when you need to claim, make sure that you read the terms and conditions of your insurance policy and make yourself aware of what is excluded and what your obligations are.

Accurate information

When you apply for cover, the application you fill out will ask for basic personal information along with information about your home.

You must be completely accurate and honest in your application. Not only is fraud a serious offence, but the insurer calculates the risk involved in insuring your property based on this information. If you provide incorrect information, the entire policy could be invalidated.

The information you’ll be asked to provide about your property includes:

• Physical address and erf number.
• Year your home was built.
• Area of the total property as well as the main home and any detached structures, such as sheds or workshops.
• Type of construction, for example, brick or timber.
• Number of storeys.
• Type of roof, for instance, tile, steel or thatch.
• Details of services such as electrical, gas and plumbing installations.
• Safety features, such as a fire sprinkler system or a security alarm.

You also need to notify the insurer if your situation changes during the policy term. For example, if you install a wood-burning stove where there was previously none, your insurer needs to be told so the policy can be reassessed.

Maintenance

Home – or building – insurance covers unexpected damage to your property. Unfortunately, it doesn’t cover problems you could have avoided with regular upkeep, so neglecting to maintain your home can lead to your claims being denied.

For example, damage from a water pipe that suddenly bursts will be covered. However, an insurance claim for a roof leak you didn’t fix could be denied because you didn’t take action to stop any damage.

A well-maintained home means fewer claims, lower costs and less inconvenience and disruption for you and your family. Also, by maintaining your home, you are maintaining its value.

Always bear in mind that the purpose of insurance is to return you to the position you were in before the loss or damage happened. Making sure you understand the details of your insurance policy will enable you to avoid any unpleasant surprises when you need to claim.

Writer : Sarah-Jane Meyer