Homeowner? Three simple steps to getting the right insurance at the right price

Owning a home is a milestone worth celebrating—but it also comes with responsibilities, including ensuring your property is properly insured. With costs rising across the board, it’s more important than ever to make sure you’re getting the right cover at the best possible price.

Whether you’re a first-time buyer or have owned your home for years, navigating home insurance can feel overwhelming. That’s why we’ve broken it down into three straightforward steps to help you make an informed decision.

Explore your insurance options

Many homeowners take the easiest route by insuring their property with the bank that issued their home loan. While this is a convenient option—one debit order, minimal admin—it’s not necessarily the most cost-effective.

You’re not required to take insurance through your bank. In fact, shopping around and comparing quotes from independent insurers could save you a significant amount each month. When requesting quotes, be sure to compare policy details carefully, looking at:

Exclusions – What’s not covered in the policy?

Additional excesses – Are there extra costs in specific scenarios, like water damage claims?

Upfront admin fees – Are there any hidden costs?

Tip: Keep the excess amount consistent across all quotes to make sure you’re comparing apples with apples.

Insure your home for its replacement value

A common mistake homeowners make is insuring their home for its market value instead of its replacement value.

Market value is the price you’d get if you sold your home. This includes location, property demand, and surrounding amenities.

Replacement value is what it would cost to rebuild your home from scratch. This includes demolition, site clearance, municipal fees, and professional services, along with construction and finishing costs.

If you insure your home based on market value, you could end up overpaying on premiums, or worse, underinsuring your home, which can leave you short if disaster strikes.

Tip: To get an accurate replacement value, break it down into three key areas:

Structure – Calculate the cost of rebuilding your home from the ground up, excluding fixtures and finishes.

Special features – Consider add-ons like swimming pools, fireplaces, or imported tiles.

Site preparation – Factor in earth-moving costs, particularly if your home is on a sloped property. A good rule of thumb is to add 20–30% to your base building costs.

Adjust your excess to fit your budget

Your excess is the amount you pay when you make a claim. Many home insurance policies have a fixed excess, but some allow you to adjust it.

Raising your excess usually lowers your monthly premium, but it also means you’ll have to pay more out-of-pocket if you need to claim. On the flip side, opting for a lower excess means higher premiums but less financial strain when you need to claim.

Tip: If your geyser bursts tomorrow, how much could you comfortably afford to pay upfront? That’s a good starting point for setting your excess.

Your home is one of the biggest investments you’ll ever make, so it pays to take the time to get your insurance right. By shopping around, ensuring you’re covered for the correct amount, and adjusting your excess to suit your needs, you can secure the right cover at the right price.

Thinking of switching insurers? With Naked, you can get a quick, no-obligation building insurance quote in minutes no phone calls required.

ALSO SEE: REASONS WHY YOU NEED TO INSURE YOUR HANDBAG