WHY YOUR DEFAULT HOME INSURANCE IS NOT NECESSARILY THE BEST DEAL

Saturday, August 29, 2015

 

Buying a house is probably one of the biggest financial commitments you will make as an adult, and for this reason it is important that you do your research before you commit. When you buy a building you will be required to take out insurance, and many people do this with their new or existing bank or building society when arranging their bond. However, this is not a guarantee that you are getting the best deal.

“According to the Centre for affordable Housing in Africa, the average nominal house price in the fourth quarter of 2014 was R1.5 million in the Western Cape, R1.4 million in Gauteng and R960, 000 in the Eastern Cape,” says Derek Wilson, Head of Hippo.co.za, South Africa’s leading insurance and financial comparison website that helps consumers save money by comparing a range of SA providers across financial products such as Car Insurance, Household Insurance, Buildings Insurance, Life Insurance, Medical Aid and more. “Between quarter four of 2013 and quarter four of 2014, the average nominal house price in the Western Cape increased by 15.5%, in Gauteng it increased by 10.8% and in the Eastern Cape it decreased by 6%.”

This indicates that there simply cannot be a “one size fits all approach” when it comes to Buildings Insurance. As the prices of houses fluctuate from one quarter of the year to the next, the value of your house will also increase or decrease substantially and this fact could leave you either under or over-insured.

When it comes to Household Insurance, there is also inflation to consider, which fluctuates every year and in turn will affect the price of replacing the contents of your home with new items should they be stolen or damaged. It is thus of utmost importance to review your Household Insurance at least once a year and adjust your cover accordingly

“Although it might seem more convenient to take out your Buildings or Home Loans Insurance with the same financial services provider that you signed a bond agreement with, this is not necessarily always the cheapest option,” concludes Derek. “There is no harm in comparing with Hippo.co.za before you buy across the board. And even if you need to change your insurance provider, it really isn’t the admin nightmare it used to be in the past.”



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