INSURING YOUR FUTURE

Home owners’ insurance policies, to cover property damage and repairs, are usually mandatory when taking out a home loan.

WHEN you buy a new home, the bank will usually insist that you take out a home owners’ insurance policy. Gerhard Kotzé, managing director of the RealNet estate agency group, says this will provide for the repair or replacement of the property in the event that it is damaged or destroyed by fire, flood, wind, earthquake or other disaster.

“Such policies often also provide insurance against less serious damage resulting from things like burst geysers, falling trees and collapsing garden walls. They provide home buyers with peace of mind in that they know they will not end up having to pay off a home loan on a property that has become uninhabitable, or have to pay for it to be repaired or rebuilt.”

However, most lenders are less insistent that you take out life insurance to cover the outstanding balance of your home loan in the event of your death.

“This cover, usually referred to as bond insurance, can make all the difference to your family at a difficult time by enabling them to stay on in a home that is fully paid off and so you should consider it very seriously,” Kotzé says.

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