Many people pay little attention to the nature of their household insurance, besides making sure that it meets the approval of the mortgage company. The truth of the matter is that it is crucial for protecting your home and assets, and you need to select the appropriate cover that will best fulfil your needs.

Household insurance provides cover for various damages related to your home – such as fire, theft, and vandalism – and often extends to adjacent structures like a garage or shed, as well as your personal belongings within the house. If your home becomes temporarily unusable, it can even cover your living expenses. Therefore a range of risks are considered to optimally protect your home and assets.

The two main types of household insurance are contents insurance and buildings insurance, which each serve separate functions. Depending on the insurance company, you usually have the option of buying the two types separately or alternatively, together as a package deal.

Buildings Insurance

This insurance policy covers the immovable structures on your property, and takes into account any permanent fixtures, fittings, and improvements that form part of the general building structure – such as walls, windows, doors, roofs, bricks, the swimming pool, cables and pipes. Garages and outbuildings are also part of the building structure, and therefore fall under this category too. All of these components are protected from naturally occurring events and where applicable, accidental damage.

The policy typically covers damage caused by:

• fire, explosion, lightning and earthquake
• the impact of aircraft vehicles or animals
• theft
• bursting or overflowing of geysers and water pipes
• alterations and additions
• power surges
• oil leaks
• temporary accommodation
• damage caused by riot and malicious persons
• liability to other people, including domestic employees

As a general rule, buildings insurance includes anything that would be left behind if the occupier moved. Take note that there is limited cover for certain structures, which you will need to check with your insurance company. This can include boundary walls, gates, paths, and sometimes swimming pools. If you are in the position of renting a home or apartment, be aware that the landlord is liable for paying buildings insurance, not the tenant.

Contents Insurance

When it comes to other types of household insurance, contents insurance covers anything in a property that is likely to be removed when the owners move. Items in this category include your furniture, jewellery, clothes, and any electrical appliances such as a television or washing machine. Carpets are also included in your policy cover, even if they are fitted. If the home is made uninhabitable, additional costs can be covered.

Damage from a very wide range of risks will be included, namely:

• fire, explosion and earthquake
• theft
• power surges
• water and oil leaks
• acts of nature (wind, thunder, lightning, storm, hail, flood and snow)
• riot or malicious damage
• falling objects (such as trees)
• contents being transported during a removal
• temporary accommodation
• liability to other people, including domestic employees
• accidental breakage to mirrors and glass

You can usually also add legal liability to your contents insurance policy. Liability could arise if you act negligently and end up injuring other people or damaging their property. In conjunction with this, you have the option of obtaining cover for legal expenses too – both of which can come in handy should an accident occur and you find yourself facing large bills for damages and legal fees.

When Will you Need Household Insurance?

Typically, if you have a mortgage, your lender will require you to have buildings insurance. While contents insurance is completely optional, it is a small price to pay for protecting the sum of your personal possessions in the event of a burglary or accident.