The cost of home insurance in South Africa is on the rise because of an increase in unforeseeable events like fire, crime, power outages, and natural disasters like flooding.
You wouldnโt want to find yourself in a situation whereby you have lost possessions without the possibility of recovery. Thus home insurance is fast becoming a strategic necessity for many South Africans.
Considering how the cost vs the need for home insurance can be frustrating. We have therefore come up with a comprehensive list of what you can do to reduce the cost of home insurance.
If you a first time home buyer, we recommend you read our article: 10 things to consider when buying a home for the first time.
Buildings vs Contents home insurance
Before forging ahead with the list of strategies on how to cab the costs of home insurance, it is essential to note that there are two types of home insurance in South Africa, namely; buildings insurance and contents insurance. Both are strategic to have, especially for people in metropolitan cities where crime, power outages and natural disasters are high.
What is Home and Buildings Insurance?
Home and Buildings insurance covers the house you reside in and the contents within the house in the event of fire, crime or natural disasters.
The insurance pays the total costs of property lost, it also factors in inflation over time. Claims may go as far as including property belonging to guests and domestic staff members. The insurance is payable on both a monthly and annual basis.
What is Home Contents Insurance?
Home contents insurance covers possession stored within the house in the event of fire, crime or natural disasters. The home contents insurance covers the cost of the property, factoring in inflation. This insurance only covers the property of anyone residing in your home, it may at times include visiting guests depending on your insurer.
Here are 5 ways to get cheap home insurance in South Africa:
- Get Online Home Insurance Quotes
This is a no-brainer. Getting online home insurance quotes is fast, painless and free. It allows you to easily compare among the insurance providers. When doing your comparison, make sure to take into consideration how comprehensive the offer is, the pricing and the reliability of the insurance provider. You can check our reviews of insurance companies for ratings. - Improve your Credit Score
As part of accessing your risk profile, insurance companies will likely check your credit score. If your credit score happens to be bad, it means you are high risk and may signal inability to self organise.
And people who are not organised are prone to misfortune and therefore present high risk to insurers; consequently, their home insurance in South Africa tends to be way costly. It is therefore wise to work on your credit score as you prepare to get home insurance. See our article of 7 Genius ways to improve your credit score. - Bundle your home insurance with your other insurance covers
Most insurers offer numerous insurance products. It goes without saying that they would love to sell you as many products as they can possibly offer. This presents you with leverage to negotiate the pricing of most additional products.
If, say, you already have life insurance with a particular insurer, you can easily negotiate home insurance pricing. They will be inclined to offer you a discount than lose you to a competitor.
Check out our article on 10 Best Life Insurance Covers in South Africa, - Get an alarm system
In South Africa, home insurance pricing is all about risk profile, the more you prove to be a low risk, the lower the cost of your home insurance is.
Installing an alarm system signals that you are a security-conscious person and it frankly reduces the risk of losing a property to crime or fire. Remember, you need to mention the fact that you have an alarm system when discussing pricing with an insurance broker.
Donโt assume that because he sees the alarm system, therefore, he will factor it when calculating the pricing. You need to tell him to consider it. - Choose annual instead of monthly payments
If you have the option of paying annually or monthly opt for the former. It will significantly reduce administrative costs for them. Most insurance companies have rewards for clients you opt for annual payments. This is their way of encouraging the choice of annual payments.
Conclusion
To get cheap home insurance in South Africa, you need to be smart about it. Do research on insurance companies. Keep in mind that โnot all that glitters is goldโ.
Insurance companies invest millions every year in hiring brilliant salespeople, whose job is to sell you insurance products.
They really donโt care about you, as most of these salespeople save the interests of their employers, not yours. In short, donโt listen to everything insurance brokers tell you, do your own research.
