IT'S ON THE HOUSE

Household insurance: two words that strike fear (and confusion) into the hearts of South African homeowners. But don't panic! Here's everything you need to know...

- KEITH BAIN

For most of us, it is simply unimaginable to run the risk of losing everything by failing to have the appropriate coverage. With insurance, a monthly premium enables us to get back the value of what is damaged, destroyed, washed away or stolen when something goes wrong.

The risks are not only many and varied, but more often than not are also completely unexpected. Aside from natural disasters - aka 'acts of God' - which can damage parts of your home as well as its contents, there are risks of theft, electrical surges due to load-shedding and even unimaginable incidents such as neighbourhood riots or a fire. For these and all other eventualities, household insurance offers protection.

IF YOU OWN YOUR HOME...

It's vital to have homeowners insurance, also known as building insurance. This covers the actual structure - floors, walls, roof- as well as other permanent fixtures. The cost of such insurance is related to the cost of replacing your entire home. Coverage is against sudden damage or loss due to unforeseen incidents such as theft, vandalism, fire, lightning and certain kinds of natural disasters. If you have a mortgage, the lending institution makes this kind of insurance a compulsory part of your loan agreement.

"Everything and the kitchen sink" is how one insurer describes its comprehensive building insurance. Their policy claims to cover any kind of damage that "Mother Nature can throw at your home", plus it includes the little inconveniences on the side - things such as getting new keys and remote controls after an incident, as well as having security staff watch your home while it's vulnerable. It might also cover the added expense of having to call out an emergency plumber or electrician in the middle of the night, which is all-too-often necessary when things go wrong.