Home insurance in South Africa

Buildings insurance vs household insurance

The Insurance Act 18 of 2017 puts both covers in the property class of non-life insurance: cover for damage to or loss of property you own, use or possess. In practice insurers sell it in two sections, and the National Financial Ombud Scheme (NFO) also reports complaints in two separate categories, homeowners' and household contents.

The R10 million and R5 million limits come from Schedule A of the NFO Rules; they can be exceeded if the insurer agrees.

Your bond: what the law allows the bank to ask

Section 106 of the National Credit Act 34 of 2005 sets the rules when a lender asks you to insure:

• Section 106(1)(b)(i): under a mortgage agreement, the credit provider may require insurance on the property that is subject to the mortgage, not exceeding its full asset value.
• Section 106(2): the lender must not demand insurance that is unreasonable or at an unreasonable cost, given the actual risk.
• Section 106(4)(a): if the lender proposes a particular policy, you must be told of your right to waive it and substitute a policy of your own choice. The National Credit Regulator restated this right in its June 2024 guideline.
• Section 106(5): for a policy the lender arranges, it may not add a surcharge above the actual cost, must disclose the cost and its commission, must explain the terms and give you a copy, and is a loss payee only up to the settlement value — the rest is paid to you.
• Section 106(6): if you use your own policy, the lender may ask for written directions naming it as loss payee up to the settlement value.

Credit life insurance on the loan itself is a separate product: see credit life insurance.

Under-insurance and the average clause

If the value you declare (the sum insured) is lower than what the property is really worth, an insurer can apply average. Sasria's own Material Damage Policy 2026 gives an official definition: average is a condition under which the insurer is entitled to proportionally reduce the amount of a claim where the value at risk exceeds the sum insured, because you are underinsured. Under clause 14 of that wording, you are treated as your own insurer for the difference.

A simple illustration of the proportion (not a quote): if a home worth R2,000,000 is insured for R1,500,000, it is insured for 75% of its value, so a R100,000 claim may be paid at 75%, before any excess. Each insurer's own wording decides whether and how average applies — check your policy schedule.

1. Insure buildings for the cost of rebuilding, not the market price of the house.
2. Update the sum insured after renovations or extensions.
3. List high-value contents separately if your policy asks for it.

Why home claims end up at the ombud

The NFO's 2025 annual report gives the real pattern of disputes in its non-life division:

The lesson: keep the house maintained (roof, gutters, pipes, geysers) and keep proof of it, because wear and tear is the most common reason home claims are rejected.

Sasria: the add-on for riots and unrest

Ordinary home policies exclude damage from riots, strikes, public disorder and terrorism. That risk is covered by Sasria SOC Ltd, which sells Domestic Cover for homes, household contents and personal items through your insurer (Sasria).

Sasria's rates schedule effective 1 October 2025 sets the domestic fire-section rate at 0.003630% of the sum insured per year (minimum R30) or 0.000363% per month (minimum R3). Your insurer collects it with your premium. Details: Sasria explained.

If your claim is rejected

1. Complain to the insurer first, in writing, using its internal complaints process — the NFO requires this (NFO).
2. If you are still unhappy, take it to the National Financial Ombud Scheme. It is free for complainants (Rule 1.4 of the NFO Rules).
3. Do it within three years of when you became aware of the cause to complain (Rule 4.2.2(e)). Lodging the complaint suspends prescription while the NFO handles it (Rule 6.1).

More on the steps: insurance complaints in South Africa and your rights as a policyholder.

Sources

1. National Credit Act 34 of 2005 — Government Gazette 28619, 15 March 2006 (gov.za)
2. National Credit Regulator — Guideline 003/2024 on the Credit Life Insurance Regulations (June 2024)
3. Insurance Act 18 of 2017 — Government Gazette 41388, 18 January 2018, Schedule 2 Table 2 (gov.za)
4. National Financial Ombud Scheme — Annual Report 2025 (non-life division)
5. National Financial Ombud Scheme — Scheme Rules (28 February 2024)
6. National Financial Ombud Scheme — Complaints process
7. Sasria SOC Ltd — Material Damage Policy 2026 (policy wording)
8. Sasria SOC Ltd — official website (products, claims, contacts)
9. Sasria SOC Ltd — Updated Rates Schedule, effective 1 October 2025 (v4, published July 2026)