One of the “compulsory” forms of insurance that people with bonds have to have is Home Owners Insurance (HOI). This is insurance that covers the cost of replacing the building if it is destroyed through things like fire and floods. Usually the bank that provides the bond also very kindly arranges this insurance and the unsuspecting home owner signs the policy document along with all the other bond documents. There are at least two huge problems with this Continue reading It’s often the little things that matter…
If you have a bond on your property, please make sure that you are not paying the home owners’ insurance premium via your bond account. The banks are very quick to set this up for you because it is good for them as the premium will never be rejected but the reality is that you will end up paying interest on this premium for the full term of the bond. This could result in you paying thousands extra – what a waste of money.
Rather, make sure that the premium comes off your normal current or savings account. You would also be wise to get a comparative quote from your short-term insurance provider. The banks are notoriously uncompetitive when it comes to this kind of insurance and while you are required by the bank to have Home Owners’ Insurance, you are not compelled to take it out through the bank providing the bond.
Heard from a client this morning who was involved in a car accident…he’s fine but the car’s not – R50000 damage. He was on to the insurers right away who sent an assessor who has rejected the claim. Reason? The tyres are smooth and therefore the car is not technically roadworthy!
We dont do short term insurance and I dont know if this is the end of it (I would take it further) but I do know that when you enter into an insurance contract on your car it is your responsibility to keep it roadworthy at all times – failure to do so can result in a claim being repudiated. In fact the wording on my policy document states that I need to take “all reasonable steps to maintain the vehicle in accordance with the road worthy requirements of any legislation applying in the territorial limits.”
Pretty harsh stuff when you read the fine print and I guess a state of roadworthiness includes things like the the license being up to date as well. Better get out there and kick the tyres!