Friday, November 30, 2012

According to research, many homeowners do not know the difference between residential buildings insurance and home contents insurance.

This is perfectly understandable – residential buildings insurance is sometimes referred to as homeowners insurance and home contents insurance is otherwise known as household contents. Confused? You needn’t be.

According to Telesure MD, Thomas Creamer: “Quite simply, residential buildings insurance covers the loss or damage to the actual building structure as a result of fire or explosion; earthquake, storm, flood, lightning strike and resultant damage; and, ground movement including subsidence and landslip amongst others.

“Home contents insurance on the other hand covers the possessions that are in your home. An easy way to determine this is to imagine taking the roof off your home and turning it upside down, everything that falls out of your house constitutes your home contents. Everything that remains should be insured under residential buildings insurance.”

In addition to the uncertainty surrounding the name of these insurance policies, many homeowners do not realise that there are other, often cheaper residential buildings insurance options out there and homeowners do not necessarily have to place their residential buildings insurance with their bank or bond provider. 

“With Dial Direct Insurance for example, homeowners could save an average of R120.00 per month and up to R50 000.00 over the typical home loan period of 20 years on their residential buildings insurance,” notes Creamer.

A bank will often put great pressure on the homeowner to insure through its associated insurance company, but the truth is that it does not matter which insurance company you use, as long as you insure your home. 

“This leaves you free to shop around for the best deal. In the end, it is your choice,” concludes Creamer.

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