Building insurance cover is just as important as household contents insurance for homeowners who wish to safeguard their property in the event of a disaster.
When considering home insurance, many people might think only of covering contents and even then often underinsure because they don’t maintain up-to-date replacement values.
Building insurance is vital. It is a compulsory requirement if a property is bonded. It protects the actual building structure and all the permanent fixtures and fittings, garages, swimming pool, paving and walls in the event of fire, floods, lightning and other unforeseen disasters. There may be limits set for the latter, which will be specified in the contract.
Property Owners need to ensure that the sum insured (replacement value) on the property is increased proportionately with current building prices.
Assess replacement costs This is critical for homeowners who should reevaluate building insurance cover annually as there may be a significant difference between the actual replacement cost of the building and the market value of the property.
When you are making major changes to your home, it is vital to contact the insurer of your property to ensure that your coverage is still adequate. Anyone undertaking a home renovation project should therefore make sure that they have their property valued afterwards to determine whether they are insured sufficiently in the event of a claim.
What about thatch? Premiums on a standard construction – tile, roof and brick – as opposed to a non-standard structure incorporating timber frame walls and a thatch roof will differ because of the fire risk associated with the latter. If you’re buying a home that is considered high risk because of its structure, be prepared to pay more.
Get proper valuations A building insurance policy provides cover on a “new for old” basis. Get a certified valuations company to give you an annual update on what cover you need to rebuild your home and replace all the fixtures and fittings from scratch if necessary. Then shop around for the best cover.
Update your policy Get into the habit of updating your policy annually as replacement values and construction costs traditionally increase year on year. If you are thinking of renovating, consider how that will influence your premium as well.
If you are thinking about buying a new home, remember to factor in building insurance to your monthly budget.