SHOP AROUND

Where property value is concerned, Hannes Smith, Old Mutual Insure’s executive for alternative business solutions, says there’s a common misconception among property buyers when it comes to understanding a property’s replacement value.

“Building insurance works on replacement value, not market value,” he says. “Calculate the replacement value in the event that there is a total loss of your building – for example, fire brigade, demolition and architect costs, plus building materials and labour. Take out cover for that value and not the market value of the property,” he says.

Deirdrie Grové, director of Status Insurance Brokers, agrees, saying that when it comes to gathering quotes, you’re not obliged to opt for the insurance offered by your bond provider.

“South African law allows a homeowner