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What Affects Your Insurance Premiums?

Owning a home comes with pros and cons. One of the cons is that owning a home can cost you quite a lot of money on a monthly basis. But it’s also one of the most valuable assets you can ever invest in.

One of the costs that potential homeowners must be aware of is building insurance. Building insurance is non-negotiable as lenders want to protect their own interests when awarding a home loan to a purchaser.

Many people ask: “how much does home insurance cost in South Africa?”. However, the answer depends on a number of factors which we will discuss in this article.

building insurance benefits

Factors That Affect Your Building Insurance Premium in South Africa

It’s important to understand that building insurance serves to cover the physical structure of your property against natural disasters and other unforeseen events. Fittings and fixtures are included in the cover.

When insurers evaluate your home for building insurance, their main consideration is risk level. Homes with inherently higher risk for certain issues will attract higher premiums, while homes that are lower risk will attract lower premiums.

During their evaluation, insurers will pay attention to the following:

Overall Condition of the Building

Insurers will assess the structure of your property for any inherent flaws or existing damage. They will evaluate the replacement cost of the property while developing a tailored quote for you. Risk will be taken into consideration during the evaluation. For example, thatch roofed homes are naturally higher fire risks and, therefore, will attract a higher premium.

Location, Location, Location

Some areas are more prone to natural disasters such as flash floods and homes built in these areas are at a higher risk of being damaged due to flood. If your home is in an area which poses a higher risk of damage due to natural disasters, consider ways to improve your home in a way that makes it more resilient to extreme weather conditions.


By carrying out regular repair and maintenance on your home and property, you can avoid increased premiums. Insurers often penalize homeowners who claim for loss or damage on a regular basis. If you are not properly caring for your home, you may find yourself claiming more than what is ideal or necessary, and you may be faced with higher premiums as a result.


Homes that are unusually vulnerable to burglary will also attract higher premiums. Although no home or homeowner is completely immune to crime, homes with additional security in place are less likely to attract criminals. Therefore, install electric fencing, alarm systems, security cameras, burglar bars, security gates, and perimeter beams to add several layers of defense against burglary and bring your building insurance premium down substantially.


Excess is a small lump-sum payment that you are required to pay when claiming from your insurance provider. The higher the excess you are willing to pay, the lower your monthly premium will be. High excess reduces the risk for the insurance company, and they show their appreciation by asking a low premium. Just be sure that you are able to afford the excess that you agree.

Your Credit Record

Your credit record is a clear indication of how much of a risk you are to credit providers. Go out of your way to maintain a healthy credit record by paying your bills on time and keeping bad debt to an absolute minimum. The better your record is, the more willing insurance providers will be to keep your premium on the lower side of life.

Phoenix Bonds – Bond Origination South Africa

Our expert bond originators are able to help you through the process of applying for a home loan in South Africa. Not only do we help you find the best deal out there, but we also help you get all the necessary documentation together for your application.

Contact us for more information.

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