As a proud homeowner your home is likely to be your biggest asset. This new responsibility also brings with it the obligation to do everything in your power to protect it from unforeseen damages and cover yourself for any costly repairs.

If you own your house thanks to a bond, you’re required to have building insurance. While banks do this to protect their investment, it also gives you peace of mind that your insurance will help pay for any necessary repairs. 

What does building insurance cover?

As a first-time homeowner, you may not know the difference between the different types of insurance available to you. This includes building insurance and home contents insurance. While building insurance covers physical structures such as walls, floors and the roof, everything in your home, including furniture and freestanding appliances, is covered by home contents insurance.

Can you switch cover from your bank to your insurer?

When buying a new house, homeowners often take out building insurance cover with the same bank where they have their home loan. Although convenient, you could get more benefits by adding building cover to your existing contents and car insurance policies, better known as a short-term insurance policy.

These benefits include:

• A single debit order
• Lower excesses
• A premium saving
• One point of contact

A single debit order

Combine your building and short-term insurance so you’re paying a single debit order and you could save on your bank costs – although this depends on the type of bank account you have.

Lower excesses

If you have building insurance with your bank and home contents with Indwe and you experience loss or damage from an event such as a burst geyser, with consequential damage to the contents, you may end up paying an excess on the building to the bank’s insurer and an excess to Indwe on contents. However, if you have both your building and contents insured with Indwe, and you experience the same event, you will only have to pay one excess as we treat the claim as one event, not two.

A premium saving

When you combine your building insurance with the rest of your cover – under one insurer – it often results in a monthly saving, as your broker is in a better position to negotiate on your behalf. For example, you have five items insured on your policy with the following premiums:

• Building:           R2000
• Car:                  R3000
• Car:                  R1400
• Contents:          R860
• Specified items: R480

All of these insured items contribute to your “insurance pool”, and it’s from here that your claims are paid. Should you have a claim on your one car, the other insured items contribute and subsidise your total “insurance pool”. If you only have your building insured, there are no other premiums to “fill up, and thus subsidise” your pool.

Furthermore, what makes you desirable or not to an insurer is your loss ratio – which is calculated based on your claims as a percentage of the premiums you’ve contributed over your insured period. Your loss ratio can quickly increase significantly, even when you have a relatively smaller loss or damage. By having all your insured items with one insurer, a loss or damage impact on your total loss ratio should be less as all items “subsidise” each other.

One point of contact

With both building and home contents under one insurer and with one broker, you have a single point of contact instead of several. This is particularly beneficial when you need to claim, as it saves time and results in less frustration and greater efficiency.

When it comes to any kind of short-term insurance cover, we recommend that you compare several quotes to find an option that suits both your specific insurance needs and your budget. As a current Indwe policyholder, chat to your Indwe advisor about insuring your buildings through Indwe. Contact us on 0860 13 13 14 or indwe@indwe.co.za.

Indwe Risk Services (Pty) Ltd is an authorised FSP 3425.