We wouldn’t dream of buying a second-hand car without first checking its service history and roadworthiness. But that’s exactly what most South Africans do when it comes to buying a house: They take the seller’s word that there aren’t any defects, and they settle for a bank’s value appraisal as proof that their new home is in good shape.

Then, when it comes to insuring the house, they make the classic error of insuring for its market value or the bond amount, instead of its replacement value.

That’s why it’s critical that you consult a professional building inspector before you put in an offer to purchase a property, says Wynand van Vuuren, client experience partner at King Price Insurance. They’ll not only identify any safety or structural issues but will also help you to determine the right amount of insurance you’ll need if you do buy a home.

“Many people think a bank’s valuation of a property is the same as a home inspection. It’s not. A bank evaluator looks to see whether there’s sufficient value in the property to secure a home loan. They don’t inspect the property for insurance purposes, structural defects, wear and tear or other maintenance-related issues,” said Van Vuuren.

So, what can a homeowner do to avoid nasty surprises? Van Vuuren has 5 tips.

Consult a professional property appraiser before you buy

It may seem like a lot of time and effort, but the consequences of not getting a home inspection could be dangerous and expensive. If something goes wrong, new buyers are often left facing immediate, expensive repair work that they can’t claim from the seller, because a property transaction is considered voetstoets, unless they can prove these defects were deliberately concealed by the seller.

Make sure you’re insured for replacement value, not market value

Homeowners are responsible for insuring their homes for the correct value. Buildings insurance should cover what it would cost to rebuild your property from the foundations up, including your boundary walls, solar panels, swimming pool, taps and tiles. It should even include what you would need to pay in a worst-case scenario, like demolition charges and waste removal, and the professional and municipal fees that are part of the building process.

Keep your home in good condition

Your buildings insurance covers you for unforeseen future events. Therefore, damage that’s due to wear and tear, or a lack of maintenance, may be excluded by your insurer. “The onus is on you to maintain the building to avoid wear and tear that might later cause or contribute to damage, like worn waterproofing or blocked gutters,” said Van Vuuren. “And always use NHBRC-accredited builders and engineers to do renovations and building work.”

Take control of your own insurance

If you’ve got a bond, it’s compulsory to have buildings insurance. This is often taken care of by your bank, and the premium is ‘hidden’ in your monthly bond repayment. But you’re not obliged to accept your bank’s quote, and it’s possible you’ll get a cheaper premium from the insurer that covers the rest of your valuables. It’s always your right to choose who insures your home (and everything else, too).

Review your home contents cover regularly

You should review your home contents insurance at least once a year. As with buildings insurance, the key is to make sure you cover your home contents for their current replacement value – don’t guess. And remember, insurers can only protect what they know about. It helps to keep the original receipts for items like big screen TVs, so that you can prove their value if you need to claim. To help you assess your home contents correctly, here’s a handy home contents inventory.

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