Home insurance in South Africa is often spoken about as if it were a single product, but it actually splits into two distinct types of cover that work together: Building (Homeowners) Insurance and Home Contents Insurance. Understanding the difference is essential so that you insure the right things at the right values, avoid underinsurance, and receive claim payouts that reflect what you have lost.
This guide explains each cover in plain language, shows where they overlap, and helps you decide which is right for your home, whether you own a freestanding house, live in a sectional title complex, or rent.
Quick definitions
- Building (Homeowners) Insurance: Covers the structure of your property and permanent fixtures against insured events such as fire, storm, lightning, burglary damage to the building (for example, a forced door), burst geysers, and often accidental damage to fixed items. Think “what would remain if you could pick up your house and shake it”: walls, roof, floors, tiles, built-in cupboards, fitted kitchens, fixed bathroom suites, electrical and plumbing installations, boundary walls, paving, garages and carports, driveways, swimming pools and pumps, fixed solar PV and inverters, and outbuildings.
- Home Contents Insurance: Covers the movable possessions in your home against perils like theft, fire, storm, and accidental damage (subject to policy wording). Think furniture, appliances, clothing, curtains, electronics, décor, and non-fixed tools. If you can carry it out, it is usually “contents”.
- All-risk / Portable Possessions: An add-on to Contents for items regularly taken out of the house (laptops, jewellery, cellphones, cameras). These often need to be specified with make, model, and value; some can be covered under unspecified limits.
Why the distinction matters
The split matters because:
- Different sums insured: Buildings are insured for rebuild cost, not market value. Contents are insured for new-for-old replacement value.
- Different risk factors: Walls and roofs face storm and structural risks; contents face burglary and breakage risks.
- Different policy conditions: Building policies may include subsidence and landslip as an optional benefit, geyser cover, and requirements around maintenance. Contents policies may impose security conditions (for example, burglar bars, security gates, or an armed-response alarm) and have limits for certain categories like jewellery or audio-visual equipment.
What exactly counts as “building”?
Typical inclusions under Building (Homeowners) Insurance:
- Primary dwelling structure: walls, roof, foundations
- Permanent finishes: tiles, wooden or laminated floors, cornices, skirtings
- Fixed installations: electrical wiring, DB boards, plumbing, geysers, solar geysers
- Built-in kitchen cupboards, fixed stoves and hobs, extractor fans
- Fixed bathroom suites, showers, baths, basins, toilets
- Outbuildings, garages, domestic quarters, wendy houses fixed to foundations
- Boundary walls, palisade fences, gates, intercoms, paving, driveways
- Swimming pool structures and fixed pumps
- Fixed solar PV, inverters and batteries that are permanently installed and certificated
- Boreholes and fixed pumps
- Permanent blinds or shutters that are built in
Common exclusions under buildings: wear and tear, poor maintenance, damp and gradual deterioration, defective design or workmanship, and anything movable (for example, loose rugs, free-standing shelves). Thatch roofs are often insurable but have special fire-risk conditions (for example, lightning protection, chimney clearance, or spark arrestors).
What exactly counts as “contents”?
Typical inclusions under Home Contents:
- Furniture, décor, carpets and loose rugs
- Appliances (fridges, washing machines, microwaves), TVs, sound systems
- Clothing, linen, cutlery, crockery
- Non-fixed mirrors and artwork
- Computers, consoles, and small electronics in the home
- Tools and garden equipment that are not permanently fixed
- Kids’ bicycles and sports gear kept at home (subject to policy terms)
Key limits and conditions to watch:
- Jewellery, watches, and precious items often have sub-limits within the overall contents sum insured unless specified.
- Cash is usually limited or excluded.
- Home office equipment may be covered up to a sub-limit; beyond that you may need to specify items or take commercial cover.
- Power-surge protection may be required for certain electronics.
- Security compliance (for example, burglar bars on opening windows, security gates on external doors, alarm activation when premises are unoccupied) may be a warranty. Breaching a warranty can jeopardise a claim.
Building vs Contents at a glance
| Feature | Building (Homeowners) | Home Contents |
|---|---|---|
| What it covers | Structure and permanent fixtures | Movable household possessions |
| Sum insured basis | Rebuild cost (professional replacement as new, including demolition & fees) | New-for-old replacement value |
| Common add-ons | Subsidence & landslip, accidental damage, power-surge to fixed systems, geysers | Portable possessions (all-risk), accidental damage, power-surge to appliances |
| Common conditions | Maintenance obligations; compliance and certificates (electrical, gas, solar) | Security requirements; item specification for high-value categories |
| Typical claim examples | Hail damages roof; burst geyser damages ceilings; boundary wall collapse | TV stolen in burglary; fridge damaged by power surge; sofas destroyed in fire |
Special property types
Freehold houses
Owners usually need both Building and Contents. If the property is financed, the bank will almost always require Building cover for the duration of the bond as a loan condition.
Sectional title (complexes and apartments)
The body corporate is typically responsible for a sectional title building policy that covers the block and permanent fixtures up to the inside of your unit’s walls (check your rules and schedule of insurance). As an owner, you still need Contents (and usually all-risk) for your belongings, plus consider accidental damage to fitted kitchens and bathrooms if the scheme policy’s definition of “fixtures” is narrow. Improvements above standard finishes should be disclosed.
Landlords
You need Building for the structure and may add landlord contents for items you provide (for example, fitted appliances, blinds, or furnished items). You should consider loss of rent following an insured event and landlord liability.
Tenants
You do not insure the building. You should take Home Contents for your own belongings and consider tenants’ liability for accidental damage to the landlord’s property.
Solar, inverters and load-shedding realities
Many homeowners have invested in solar PV, inverters and battery systems. Insurers generally treat permanently installed systems as part of the building if they are fixed to the structure, professionally installed, and have valid Certificates of Compliance (electrical and, where applicable, SSEG registration with the municipality). Portable power stations, loose panels, and removable inverters typically fall under Contents or All-risk.
Power surges associated with load shedding are a frequent cause of damage to electronics and system boards. Some policies automatically include surge cover up to stated limits; others require an add-on or the installation of surge protection devices. Read your wording and install protection where required.
SASRIA: Riot and civil commotion cover
In South Africa, damage caused by riot, strike, public disorder, civil commotion and terrorism is not covered by standard home policies but is typically available through SASRIA (a state-owned special risks insurer). SASRIA cover is usually added to your policy schedule for a small additional premium and can apply to buildings and contents. If your area has seen unrest, ensure SASRIA is listed on your schedule.
How insurers set premiums
Premiums for both Building and Contents consider:
- Sum insured (higher cover equals higher premium)
- Construction type (for example, thatch vs tiled roof)
- Location and crime profile
- Security measures (burglar bars, security gates, alarm and armed response)
- Claims history
- Occupancy and use (owner-occupied vs rented; business activity at home)
- Risk improvements (electrical compliance, surge protection, water-leak detection)
You can reduce premiums by adjusting excesses (higher excess, lower premium), installing approved security, removing old or duplicate cover, and maintaining the property to reduce claim frequency.
Sum insured: getting the numbers right
Buildings — insure for rebuild cost
Insure for the full professional replacement cost of your home: demolition, debris removal, professional fees (architects, engineers), materials and labour at current rates, municipal plan fees, and boundary structures. Market value is often irrelevant, because it reflects land value and local demand. A cost estimator from a quantity surveyor or your insurer’s calculator is useful, and you should update the value annually for inflation and improvements.
Contents — insure for new-for-old replacement
Walk room by room and list items with their new replacement price today, not what you paid originally. Pay attention to high-value categories (jewellery, artwork, Persian rugs, high-end audio-visual gear), which may need specification. Keep purchase records and serial numbers where possible.
The “average” clause and underinsurance
Most South African policies apply average (also called proportional settlement) if you are underinsured. If your sum insured is lower than the true replacement value at the time of loss, your claim will be reduced proportionally.
Example (Buildings):
- True rebuild value: R2 000 000
- Sum insured: R1 500 000 (you are 25% underinsured)
- Partial loss: R200 000
- Payout (before excess) ≈ R200 000 × (R1 500 000 / R2 000 000) = R150 000
The same principle can apply to Contents. The fix is simple: insure for the correct values and update them routinely.
Common add-ons and how they help
- Accidental damage: Extends cover for unexpected breakages and mishaps, such as a dropped TV or cracked stone countertop.
- Subsidence and landslip: Important in areas with dolomitic soil or sinkhole risk; often optional, sometimes subject to geotechnical exclusions.
- Power surge: Protects electronics and systems against voltage spikes; may require surge protectors.
- Geyser cover (including wear and tear): Many policies cover geyser bursts and resultant damage; elements and thermostats are sometimes covered as part of wear-and-tear benefits.
- All-risk / portable possessions: Essential for items you carry daily, especially cellphones, laptops, and jewellery.
- Personal liability: Often bundled, protecting you if a third party is injured on your property due to your negligence. Check the limit and consider top-ups if needed.
- Loss of rent / alternative accommodation: Pays for temporary accommodation if your home is uninhabitable after an insured event; landlords can cover lost rental income.
Security requirements and warranties
Many Contents policies impose security warranties. Common examples:
- Burglar bars on all opening windows and security gates on external doors
- A linked alarm that must be armed when the premises are unoccupied
- Proof of forcible and violent entry for theft claims
Failure to comply can lead to claim rejection. If you improve security, inform your insurer; you may qualify for a reduced premium.
Claims: what to expect
- Safety first: Secure the scene and prevent further loss (for example, board up a broken door, switch off water after a burst pipe).
- Notify the insurer promptly: Most policies require reporting within a set period (often 30 days).
- Documents: Provide your policy number, a detailed description, photos, inventory of lost or damaged items, and proof of ownership and value where available.
- Police case number: Needed for theft or malicious damage claims.
- Assessors and suppliers: The insurer may send an assessor or appoint panel contractors. Keep damaged items for inspection.
- Excess: You will pay the stated excess; settlement is net of excess and any average applied.
- SASRIA: If the loss results from riot or similar events, the SASRIA path is used; your insurer or broker will guide you.
Tip: Keep an updated digital inventory with serial numbers and invoices in cloud storage.
How to choose: Building vs Contents (and both)
Use this decision framework:
- You own a freehold home:
- Building cover is virtually essential (especially if bonded).
- Contents cover is strongly recommended to protect your belongings.
- Add all-risk for items you carry out of the house.
- You own a unit in a sectional title scheme:
- The body corporate’s policy usually covers the structure. Confirm the scope and any gaps.
- Take Contents cover and consider accidental damage to fitted items if your scheme policy is narrow.
- Add all-risk for portable valuables.
- You are a landlord:
- Building, landlord contents (if furnished or semi-furnished), loss of rent, and landlord liability.
- You are a tenant:
- Contents plus all-risk. Consider tenants’ liability if the landlord requires it.
- You have solar/inverter systems:
- Ensure they are declared and insured correctly (building if fixed, contents or all-risk if portable).
- Add power-surge and comply with electrical certificates and installer requirements.
Practical examples
Scenario 1: Burst geyser damages ceilings
- Building policy covers the geyser and resultant damage to ceilings and cornices.
- Contents policy covers damaged loose rugs or furniture if water ruined them.
- You pay the building excess (and contents excess if applicable).
Scenario 2: Burglary, TV stolen, door forced
- Contents covers the TV and other stolen belongings, subject to any item limits.
- Building covers the forced door and frame.
- Security warranties must have been met (for example, burglar bars, armed alarm if required).
Scenario 3: Hail damages roof and solar panels
- Building covers the roof and fixed solar panels.
- If batteries and inverters are fixed installations, they are also under Building.
- If you have a portable power station stolen later from your car, that is an all-risk claim.
Scenario 4: Riot damage to boundary wall
- SASRIA cover responds if it is on your schedule. Standard Building cover excludes riot by default.
Avoid these pitfalls
- Insuring buildings for market value: You might overpay or be underinsured. Use rebuild cost.
- Guessing contents values: Do a room-by-room inventory; include clothing and linen.
- Ignoring item limits: Specify jewellery and high-value items to avoid capped payouts.
- Forgetting improvements: Renovations increase rebuild cost; tell your insurer.
- Not reading warranties: Security and compliance conditions matter; breach can void claims.
- Wrong category for solar: Declare whether systems are fixed or portable.
- Letting inflation erode cover: Index-link sums insured; review annually.
- Assuming sectional title covers everything: It rarely covers your movable belongings or certain upgrades inside your unit.
- No surge protection: In load-shedding country, this is a low-cost lifesaver for electronics.
Frequently asked questions
1) Is Building insurance compulsory?
By law, not generally. However, bonded properties almost always require Building insurance under loan terms. It protects the lender’s security and your own financial position.
2) Does Contents insurance cover items outside the home?
Typically no, unless you add all-risk for portable items. Some policies offer limited cover for items temporarily removed to, say, a boarding school residence, but conditions apply.
3) Are geysers covered even if they fail from old age?
Many policies cover geyser bursts and resultant damage; elements and thermostats are often covered as part of wear-and-tear benefits. Check your wording.
4) Are power surges covered during load shedding?
Often yes, but check whether it is automatic, an add-on, or subject to surge protection devices.
5) How do I prove ownership for Contents claims?
Invoices, bank statements, serial numbers, photos, warranties, or even user manuals can assist. Keep digital records.
6) Who helps if a claim is unfairly rejected?
Speak to your insurer or broker first. If unresolved, you may escalate to the Ombudsman for Short-Term Insurance (OSTI).
Step-by-step: set up the right cover today
- Decide your categories: Building, Contents, and All-risk where needed.
- Calculate sums insured:
- Building: use a cost estimator or quantity surveyor inputs.
- Contents: room-by-room list with current replacement prices.
- List specifications: Jewellery, watches, artwork, bikes, laptops, and any single item above your policy’s unspecified limits.
- Secure the home: Fit burglar bars, security gates, and a monitored alarm where required; install surge protection.
- Document compliance: Electrical CoC, gas CoC, and solar installation compliance and municipal registrations where applicable.
- Choose sensible excesses: Balance affordability with risk appetite.
- Check add-ons: Subsidence, accidental damage, power surge, loss of rent/alternative accommodation, personal liability.
- Review annually: Update sums insured for inflation, upgrades, and new purchases.
- Keep records: Photographs, serials, invoices, and an inventory stored in the cloud.
The bottom line
Building insurance protects the structure of your home and everything permanently attached to it. Contents insurance protects your movable possessions. Both are essential for most owners, and Contents is vital for tenants. The right sums insured, compliance with security and installation requirements, and sensible add-ons like all-risk and surge cover will make the difference between a frustrating shortfall and a stress-reducing payout when life happens.
Set up your cover carefully, keep values current, and sleep better knowing you have protected both the roof over your head and everything under it.
Sources
- Santam: Homeowners and Home Contents Insurance (policy wordings and product pages) — https://www.santam.co.za
- OUTsurance: Buildings, Contents and Portable Possessions cover (product pages and FAQs) — https://www.outsurance.co.za
- Hollard: Home Insurance overview and policy benefits — https://www.hollard.co.za
- Discovery Insure: Home Insurance benefits and security requirements — https://www.discovery.co.za
- SASRIA SOC Ltd: Special Risks (riot, strike and public disorder) — https://www.sasria.co.za
- Ombudsman for Short-Term Insurance (OSTI): Consumer complaint process — https://www.osti.co.za
- National Building Regulations (general reference) — https://www.gov.za
- Standard Bank Home Loans: General insurance requirement guidance — https://www.standardbank.co.za
Lethabo Ntsoane holds a Bachelors Degree in Accounting from the University of South Africa. He is a Financial Product commentator at Rateweb. He is an expect financial product analyst with years of experience in reviewing products and offering commentary. Lethabo majors in financial news, reviews and financial tips.
He can be contacted:
Email: lethabo@rateweb.co.za
Twitter: @NtsoaneLethabo
