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Car and household insurance

Home Insurance-Insurance For Where You Live

If you own a home you will need two types of insurance to safeguard your assets. The first insurance policy that you will require is home insurance, which provides coverage for the actual structure in which you live (your house, flat, townhouse). The second insurance policy you need to buy is home insurance, which covers the contents of your house.

For most South Africans their home is the single most valuable asset that they possess, and insuring it absolutely essential. If your property is damaged or destroyed by a natural disaster such as a fire, flood, or storm your home insurance will protect your investment. When you purchase home insurance make sure that you are aware of what is covered and what falls outside the boundaries of your policy. For instance, the home itself is covered but what about the rest of your property such as a swimming pool, tennis court, garage, or the walls around your property? Home insurance can protect your entire property and not just your residence, so make sure that you get an insurance policy for your home that is tailored to your specific needs.

When you apply for a home loan with a bank or other lending institution one of the prerequisites before they give you a bond is that you have sufficient home insurance. The banks cannot take the risk of owning an asset that is not insured, because in the event of a catastrophe they want to make sure that they can recoup their loan. Interestingly enough, tax law in South Africa proscribes the conditional sale of insurance, but an exception to this law occurs when banks lend you money to purchase a property: in this anomalous case the bank has the right to make it a condition of the loan that you take out the necessary home insurance. Banks can even dictate which insurer you use for the policy. This last point is important. Choose your bank and your insurer wisely, and find out exactly why the bank recommends certain insurers and not others (is the bank and the insurance company owned by the same holding company? Is the bank gaining by recommending a preferred insurance supplier, or do they have your best interests at heart?)

Household Insurance-Insurance For What Is Inside

Home insurance protects the roof over your head; household insurance takes care of the possessions under that roof. Household insurance is critically important in the event of a burglary, but you will definitely want to insure the contents of your house regardless of the risk of theft. Household insurance deals with items such as electronic equipment (television, computer, stereo system), furniture, jewellery, appliances, and any other items of worth that are typically found inside a home.
Household insurance protects the contents of your home against loss arising from events that are described in your policy document. You need to know exactly which events are covered, and which events are excluded, prior to any of those events occurring. The term “contents” can also refer to possessions that are typically found in a garage, outside storeroom, or on your property (outdoor grill, patio furniture), and do not exclusively refer to items inside your actual home.

When you purchase household insurance you do not individually insure each item in your house. Instead you place a total value on the contents of the house by insuring those contents for a bottom line sum. Household insurance then works in the following way: any items that need to be replaced by the insurer are executed on the basis of new for old. This means that your insurance provider pays out based on the cost to replace the insured item at prices today as opposed to what it originally cost you to buy that item years ago. You need to be aware of current prices, but this is a big advantage for policyholders.

When it comes to household insurance a lot of policyholders make one of two mistakes: they either over-insure the total value of their contents, or even worse they under-insure the value of their goods. Remember that every insurance company will use an independent assessor to determine the value of the contents that need to be replaced. If you over-insured those contents you will have paid premiums for an amount that you will never recover, but if you under-insured your contents then the potential loss is far greater in the event that you need to make a claim.

Car Insurance-Why you cannot be without it

The most common form of insurance that people own is car insurance, and it is absolutely essential for all drivers to have it. Many prospective car buyers do not realise that they cannot purchase a new vehicle without car insurance, and for first-time buyers the prospect of insuring their car is daunting and a little intimidating. There is no way around it, however, because the various institutions that deal in auto finance all share this much in common: an insistence on car insurance.

You must be aware that a number of the banks and financial institutions are closely tied to specific insurance companies or brokers. This affiliation, which can sometimes take the form of an even more incestuous relationship as with OUTsurance and First Rand for instance, means that new buyers can be bullied into accepting insurance from the institution’s “preferred insurer”. Don’t let this happen to you. You are empowered and entitled to refuse to use that preferred supplier and instead choose an independent company, The key is to be selective and shop around for the best deal that suits your needs. You don’t want to pay exorbitant premiums, and if you use an insurance broker you will certainly end up paying a lot more than if you bought your car insurance direct. You want the best possible coverage at the most affordable price.

First-time buyers, who are usually very young also need to acknowledge the harsh fact that because of their lack of experience they are liable to pay far higher premiums than experienced, older drivers, and they will also have higher excesses and penalties built into their car insurance policies.

If you are fortunate enough to be a cash buyer of a car, whether new or used, the realities of life in South Africa dictate that you still should not be without a car insurance policy. Thefts, hijackings, and a high number of accidents are a way of life here, with many drivers on the road unlicensed adding to your risk. You need to select an insurance product that matches your needs in terms of budget, added value, coverage, and payable excess amounts. Your car insurance is an important decision, but if you follow our advice the process becomes simple, safe, and affordable.