Insuring your home. Learn more about home insurance on SABC’s Expresso Show – what it covers, what it doesn’t and how Hollard’s Home Warranty can plug the gaps.
Presenter: Welcome back as we fly through another feel-good morning. You're live with Expresso. Time now to talk, in particular, to our first-time home buyers. And Brett's about to take us along to a home inspection, and he discovers everything about home insurance in the process.
Presenter: With so many different options when it comes to home insurance, it can be rather confusing knowing what to expect. Today, we're going to demystify exactly what insurers offer home buyers and homeowners.
Private Property has great advice on all aspects of owning a home, including home insurance. Home insurance is financial protection if there's a case of theft or if the building suffers damage and needs repair.
I'm reaching the final stages of purchasing my very first home, and there's so much for me to consider. One of those things, which might seem rather obvious, is home insurance.
What exactly does home insurance entail?
Lee-Ann Bobrescu: Effectively, in traditional home insurance, you must expect to be covered for the sudden and unforeseen, both for your buildings, and the contents of your home. So we talk about things like perils, like fire, lightning, storm, wind, water, hail. You can see all of these things can be attributed to a single event, and that's what you would be covered for in the traditional homeowners, and buildings, and contents insurance.
So what isn't covered by home insurance?
Lee-Ann Bobrescu: Well, normally, your home insurance won't cover you for deterioration, wear and tear, structural defects. The kind of things that you can't attribute to an event. They can happen over time. Unfortunately, these things can also be really expensive.
Are we able to fill that gap?
Lee-Ann Bobrescu: We, at Hollard, saw how many of our clients were submitting claims in the hope that it would be covered. So we want to give you a warranty on your home. So imagine, Brett, if this roof were to collapse. Let's say because the rafters had aged a bit and, suddenly, they come through the ceiling. The cost of that would be absolutely astronomical.
But now if I buy a home and I find that there's something wrong, surely I can get my money back from the seller, or even the bank?
Lee-Ann Bobrescu: So in theory, you're right. But in reality, can you imagine going along to the seller and saying, "Oh, the roof fell down. Would you mind writing me a check?" The chances are he's going to make you go through a legal process. That's going to cost you money, something you don't have when you have just bought a house. And when it comes to the banks, well, what most people don't understand is they are coming and looking at your home to establish if there's value in the home relative to what they're giving in the bond. So that's not going to help you, unfortunately.
Okay. So now I know exactly why you would want a home warranty. How do I go about getting one?
Lee-Ann Bobrescu: As a buyer, what you can do is you can make your offer to purchase subject to the house being approved for a warranty. If the seller agrees to that, we'll come and do an inspection. We'll then come back to you. And, hopefully, if the house has any defects, it will match what the seller said to you the defects are, and you'll be happy. Alternatively, we may pick up some defects that the seller hadn't disclosed, and you can then either renegotiate with the seller or require that he fixes them. Worst-case scenario, we're going to come back and decline the warranty.
But surely I can just do the inspection myself, or just get one of my friends?
Lee-Ann Bobrescu: Oh, there's a big difference between you wandering through this house, and having a general look, and seeing there's a crack, there isn't, or whatever. So we have professional inspectors who go in and properly evaluate every single aspect of the home. Once they have checked the interior thoroughly, climbing in your ceilings, checking the walls, checking the ceilings, they'll come outside and they'll check the foundations. They will check for evidence of damp. They will also check your decking and your paving. All of these things can easily turn in to problems later on.
Okay. So say I have got all clear from the check, and I have the go ahead. Why would I need the warranty?
Lee-Ann Bobrescu: It's the same as when you buy a second-hand car. You still need a 100-point safety check done, and you wouldn't expect that that means that nothing can go wrong after that. So, for example, plumbing is a great one because it's deep in the walls or deep underground. Anything can be wrong with it. It could have been badly laid. It could be deteriorating. You're only going to find out when you get blocks and bursts, and all those kind of unpleasant things. Your biggest worry is the things that can go wrong that you don't know about, and you haven't budgeted for.
Lee-Ann, let's talk rands and cents. The home warranty sounds expensive, is it?
Lee-Ann Bobrescu: If you're making an offer in a million rand home, it would be 12,000 rand extra. On a 2 million rand home, 17,400 extra. That's a rate of between 1.2 and 0.8 percent of the value of the home. If you've made your offer to purchase subject to the home being approved for a warranty, and the premium payable from the proceeds of the sale, then effective the seller pays for it. He will just have to work out, once he's paid off his bond and he's paid the estate agent, he now, also, deducts the amount that is due in the premium here. If he's happy with it, that's great. If not, it becomes a point of negotiation.
Lee-Ann, this sounds like great value. What is in the fine print?
Lee-Ann Bobrescu: Like in your vehicle warranty, you would still have to pay the cost of servicing your car. While here, you would still have to pay for your day-to-day maintenance. So this policy is there to take care of the big things that can go wrong, not the minor and aesthetics. The nice thing is you get to enjoy peace of mind that if anything goes wrong we, at Hollard, will take care of those things for you.
Whether you are already a homeowner or a first-time buyer, protecting yourself from unforeseen circumstances can save you a lot of time and money. For more information and expert advice, visit www.privateproperty.co.za.
Whether it's your first apartment in the city, a trendy suburban townhouse, or that dream family home on a golf estate, there's a home for everyone on Private Property.
