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Homeowner’s or Household Insurance?

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 jewelry. 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 itemized and insured separately. This type of insurance is not a legal requirement but is highly recommended to tenants and owners alike.


Contact our professionals on 041 363 6044 or info@kaplans.co.za for sound legal advice.




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DISCLAIMER:

This article is not intended to constitute legal advice and is produced for information purposes only and to provide a general understanding of the legal position relating to the topic. It is recommended that advice relating to the specific circumstances of your situation be sought from our attorneys before acting upon the content of this article. This article was written at a particular point in time and accordingly may not always reflect the most recent legal developments, if any, applicable to the relevant topic. Kaplan Blumberg and its partners and/or employees, are not responsible for any consequences which may follow upon any decision taken to act upon the information provided in this article.