Purchasing a home is one of the most rewarding investments you can make in your lifetime. But, being a homeowner also presents a high level of responsibility such as safeguarding this valuable asset from damage. Unfortunately, we’re still a long way from floating homes, which means that a buildings insurance policy is currently your only option for providing financial protection against destruction. Online loans for different purposes have become very popular nowadays, so it is worth considering as well, if you are looking for a solution to meet your financial needs. Visit mammothinvestor.com to find all the information you need to make an informed decision regarding loans.
When finalising your bond application, the bank’s loan officer will tell you that you can get buildings insurance as part of the package. Sounds like a sweet deal on paper, right? Why shop around for batteries when they are included in the flashlight?
You may find that many banks have buildings insurance as a condition of your mortgage rather than just part of the bells and whistles of the loan. But, before you sign on the dotted line, consider this: a previous article The King collaborated on for Private Property called Insurance: are you correctly covered? points out that the bank only has to cover itself against potential losses on the monies advanced on the mortgage, so you may want a second opinion on the value of your cover. The article further advises that shopping around for buildings insurance could be a better option for homeowners as they may end up paying lower premiums than the mortgage provider’s insurance offer.
There are consumers who prefer their bank as a one-stop shop for their insurance and mortgage needs. This is because they have established a relationship of trust with their current account provider and may not feel comfortable with other banks handling their financial affairs.
But, bankers can also make you feel like you’re back on the playground facing the school bully. Instead of pushing you around they may use scare tactics to pressure you into buying products. As such, when it’s time to seal the home loan, consumers assume that if they won’t accept the bank’s insurance offer, they may be penalised.
“In reality, the Short-Term Insurance Act, 1998 (Act No. 53 of 1998) requires the bank to inform the loan applicant that they have the freedom of choice to choose their own insurer,” says Wynand van Vuuren, Head of Legal and Claims at King Price Insurance. “The bank must also get written confirmation from the client that he/she was notified of their freedom of choice.”
There may be instances when the bank will not be satisfied with your choice of insurance if they think that it doesn’t provide sufficient cover for your home. But, in this case you still have the right to choose a substitute insurer by yourself.
When choosing your insurance provider, there are several factors that homeowners should take note of to help them make a wise decision. Wynand recommends that they compare the best policies in the market and when they do settle on the company of their choice, ensure that there are no hidden exclusions in the policy. Wynand concludes that the surefire way to protect your home against damage is to take out comprehensive cover that insures the home to its correct value.
Just as you would use a home loan repayment calculator to estimate the monthly repayments, shopping around will help you find the best policy for your buildings insurance needs.
This article was written in collaboration with Private Property
