Many homeowners realise the value of having a form of insurance to protect their homes and their possessions within their home. But some people don’t quite understand the difference between the two main types on insurance for homeowners.

The difference between household and homeowners insurance:

Homeowners insurance (also known as buildings insurance) protects the actual building structure. Cover is generally provided for explosion, fire, flood and lightning. It’s important to keep in mind that any risk that is not mentioned specifically in your policy is not covered.

Ideally, the homeowner should buy enough insurance to completely rebuild the home. For this reason, this type of insurance is based on replacement cost.

As someone who owns a home you are automatically open to various risks that may threaten you financial stability.

Having this type of insurance cover can help you to protect yourself from potential risks, such as:

  • Fire damage
  • Water damage
  • Robbery
  • Water damage due to a burst geyser
  • Flooding

Knowing the difference between household and homeowners insurance can be quite useful.

In South Africa, most standard policies cover damage caused by storm, flood, wind, water, hail or snow.

It protects you against sudden and unforeseen losses. You may not necessarily have the finances to be able to deal with a financial emergency. This is why having homeowners insurance can be so helpful.

Household insurance ensures that the contents of your home are insured against fire, theft and flood. Full value coverage will replace the items you may have lost.

This type of insurance cover also applies if you are renting property.

For valuable contents, an inventory of items room by room is important. Photographs can also be helpful. For movable items it may be better to consider All Risk insurance.

Basic cover is not too expensive and can actually save you more in the long run. An online comparison site can help you to find the best price. You need to take the time to find out about discounts and about ways to lower your risk. This will go a long way towards reducing the costs of your premium. By getting household contents insurance you may also be able to combine it with your car insurance, which may lead to lower premiums.