Growing up, I believed that insurance was for rich people.
I thought that most of us could really live without this luxury.
This was until my car broke down a few times, and our house being broken into.
When these unfortunate events happen, we often have no extra cash to replace what has been stolen or broken.
That is where insurance can be a lifesaver.
If they pay out, of course!
Insurance for government housing (including RDP) has arrived in South Africa.
Initially, I wondered how people living in government houses could even afford a premium.
But then again, it should be a calculated risk.
And it is said to give families supported by the Government Subsidy Housing Scheme (GSHS) vital protection against unforeseen financial circumstances.
There are many people that would not have houses if it were not for the GSHS.
But while these houses have undoubtedly been a very positive story for local society, South African communities are still rife with experiences of families who experience crippling financial strain after receiving their property.
“When beneficiaries of low-cost homes suddenly come across loss or damage to their properties, they face a heavy financial burden,” says Bangi Makopo, co-founder and director of Social Housing Initiative Cover (SHIC).
SHIC says it is pioneering low-cost housing insurance in South Africa.
“Most families from RDP houses don’t have access to spare money. So if something goes wrong with their houses, they can’t afford to fix it.
“Plus, if you don’t maintain a property more things tend to go wrong, and you end up in a negative cycle you can’t escape from,” says Makopo.
SHIC offers affordable low-cost housing protection against this devastating scenario. The issue of low-quality buildings is widely recognised across South Africa. Early in 2019, Human Settlements minister Nomaindia Mfeketo stated that government had spent R1.1-billion over the previous five years to repair badly built RDP houses.
Worryingly, this figure does not include costs from three key provinces: Gauteng, Mpumalanga and the Northern Cape.
“There are still a lot of reports from low-cost homeowners about poor quality, with specific mentions of weak walls and roofs.
“This is very unfortunate and can undermine the whole principal behind government subsidised housing.
“When a building is structurally weak to start with, it is vulnerable to natural forces like rain and wind. The weakness and vulnerability grows a hundred times when owners can’t afford to repair cracks, leaks and other kinds of damages.
“We’ve worked very hard to develop this product for South African communities.
“It services families that meet government’s criteria for social housing, as well as anyone with a home that is valued under R150 000.
“This has been a big point of focus for us, along with making sure the process of getting cover is simple, and fast,” adds Makopo.
We cannot neglect the fact that insurers are in the business to make money.
They need to make a profit.
Equally, we receive many complaints from property owners, whose houses are basically falling apart.
I am not confident of this kind of insurance as an option. I just don’t see people living in RDP houses queuing to get their properties insured.
Besides, the fact that most of them cannot afford it, I don’t think it will be easy to convince them that they need it.
In fact, I asked a lot of people who do not live in government housing if they have insurance and a large number of them do not.
People are not even insuring the assets they bought with their own money.
I actually think our society needs a mind shift about insurance.
I mean, after everything I have been through, you would think my car would be insured by now?
Oh well…
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