When it comes to insuring your new home, it pays to shop around.
 
Most banks or finance providers will throw homeowner’s cover (HOC) in with the bond as a package, however, since the introduction of the National Credit Act, it is no longer a requirement that one makes use of the bank’s HOC. When applying for a bond – you may choose to make use of a policy from an outside source or that offered by the bank.

Premiums offered by outside insurers are often cheaper than those offered by the bank, however, read the small print and you’re likely to discover the bond agreement does in many cases indicate that if you do opt to make use of your own insurance, the bank will increase the monthly service fees payable on your bond. “Make sure you get your bank representative to list all the costs involved with a bond at the outset – in particular ask how the insurance premiums will be calculated; Are they separate, or added to the bond? Annual premiums added to a bond may mean that you’ll be paying interest on the combined amount from day one,” says Mike Greeff, CEO of Greeff Properties, an affiliate of Christie’s International Real Estates.
 
“Once you’ve established what you can afford to pay for a house, shop around for insurance quotes based on that house price, even before you start house-hunting,” advises Greeff, adding that the biggest impact on your premiums is going to depend on the construction of your home; standard materials will draw the most reasonable rates, while timber frames and thatched roofs will cost you more. “The location of your home will be risk rated according to the security in the neighbourhood and of course around the property – buildings  in a secure complex or with good perimeter security, can reduce premiums by an average of 15 %,” says Rodney Caruana of Reece Campbell and Company.
 
“Ask your broker about the possibility of combining your motor vehicle and household contents insurance with your HOC for even better savings – and, if you can, pay your premiums in an annual lump sum,” says Greeff.
 
“Too-good-to-be –true” premiums are obviously to be treated with utmost caution as there’s bound to be a reason – such a policy might not cover all your requirements and being underinsured means you won’t be fully paid out should you need to claim. Your policy must also meet with the bank’s approval, in that banks stipulate that the property be insured for the minimum amount as reflected on the quotation. The policy schedule and wording will also be scrutinised to ensure that all the bank’s requirements are met before your bond is registered.  

Contact Greeff Properties on 021 763 4120 or email info@greeff.co.za