Homeowners’ insurance, also sometimes referred to as
‘building insurance’, provides cover in the event of damage to your home’s
physical structure. This insurance is in respect of the bricks and mortar,
roof, windows and the like of your home. Homeowners’ insurance, as the
name implies, is available to an owner of the property and would generally not
be available to a tenant. The insurance is obtained to provide cover for the
owner should the building be damaged as a result of certain types of unforeseeable
events, such as fires, floods, torrential rain and malicious damage to the
property, amongst others.
So
why is your bondholder (usually a bank) interested in the insurance details? If
a property has been bonded, it means that the bank’s security for the loan it
made to the owner lies with the property and the buildings thereon. Therefore,
in many instances, it is a bond requirement that the property must at all times
be sufficiently insured to protect the security of the bondholder.
In
sectional title schemes, it is the body corporate that is responsible to ensure
that the buildings in the scheme are sufficiently insured. Owners of
units in the scheme will note that the insurance premium is included in their
monthly levy contribution.
Household insurance, or contents insurance, on
the other hand, covers the household goods that are not covered by homeowners’
insurance. This includes furniture, electronics, clothing and even valuables
such as art and jewellery. Due to the myriad of contents in a home, household
insurance usually requires that a detailed inventory and value of items to be
included in the cover, is provided. Certain high value items may have to be
itemised and insured separately. This type of insurance is not a legal
requirement, but highly recommended to tenants and owners alike.
Photo’s by Pixabay
Article by STBB