For most South Africans, owning a home is a major financial milestone, often representing up to 80% of a family’s total wealth. But while it’s a powerful investment, it can also be a major vulnerability. Rising natural disasters, increasing crime, and a fragile economy mean many homeowners are dangerously underinsured. Fires and floods destroy around 20,000 homes a year, while 10,000 geysers burst monthly - proving that sufficient cover isn’t a luxury, but a necessity.
Despite these risks, many South Africans remain underinsured, exposing both their homes and families. According to the 2025 ASISA Insurance Gap Study, the national life insurance shortfall for death, disability, and critical illness was estimated at R50.4 trillion by the end of 2024. On average, individuals have a R3.1 million shortfall in cover, and over 85% of breadwinners lack critical illness protection.
“Approximately 651 South African breadwinners lose their ability to provide for their families every year due to death, disability, or serious illness,” says John Wessels, Executive: Product and Analytics at BetterSure Financial Consultants. “Even with rising living costs, having sufficient cover ensures loved ones can remain financially secure - and keep their homes - during life’s most unexpected events.”
Homeowners cover
Also known as building insurance, this covers the structure of your home against damage caused by fire, water, floods, lightning, landslides, or malicious acts. It’s required by banks, ensuring that if your property is damaged or destroyed, you can repair or rebuild instead of paying off a loan for a home that no longer exists.
Home contents cover
This protects everything inside your home - furniture, clothing, electronics, and valuables - against theft, fire, or disasters. You can also specify high-value items such as jewellery or laptops to extend protection outside the home, whether you’re at work or travelling.
The hidden risk
Homeowners with bonds are usually required to take out insurance, yet 49.8% of bonded households lack short-term insurance, according to the National Income Dynamics Survey (NIDS). Cash buyers face even greater risk, as no bank enforces cover. Consulting a financial adviser and reviewing your cover regularly is essential to avoid being underinsured.
Start by ensuring your cover matches your current needs - and update it as your life changes.
5 smart insurance habits to keep in check
1. Understand your cover
According to Vera Nagtegaal, Executive Head at Hippo.co.za, homeowners should review their building insurance yearly. Rising building costs and declining house prices can create a gap between your property’s market and replacement value. Always declare home upgrades and ensure they’re certified - undeclared changes can lead to claims being rejected.
2. Update your home inventory
Revisit your household contents list annually. If you’ve purchased new electronics, jewellery, or furniture, ensure your policy limits are updated so everything is fully covered.
3. Report life changes
Marriage, divorce, a new baby, or a job change can affect your life and home insurance needs. Review your policies after major life events to adjust coverage and beneficiaries.
4. Include home improvements and security upgrades
Extensions, renovations, or new security features should be added to your policy. These upgrades can increase your home’s replacement value and may even reduce your premiums.
5. Cover new purchases
From entertainment systems to appliances and clothing, all new items should be reflected in your contents insurance. Replacing everything after a fire or flood without cover can be financially devastating.
Insurance may feel like an extra expense, but it’s your financial safety net. Keeping your home, possessions, and family protected means securing not just your present comfort - but your future stability.
