Interest rate hikes and home insurance: How to navigate the changes

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As a savvy homeowner in South Africa, the possibility of another interest rate hike can be pretty intimidating. The South African Reserve Bank has increased the repo rate multiple times over the last few months in its efforts to reduce inflation, thus putting a strain on many homeowners’ budgets. According to Accenture,  even before these hikes, South Africans were already dealing with a high level of debt, with household debt exceeding 65% since.


In addition to the challenges, South African’s disposable income continue to be under pressure with the rolling load shedding schedules, rising costs of petrol, food, even electricity, and the weakening rand.


With Santam as your leading insurance expert, we will give you some tips on how best you can find affordable home insurance, beating the interest rate impact on your budget, during these challenging times.


How to make your home insurance work for you


We know how important it is to save money and have flexibility, while also safeguarding what is most important to you. Now, home insurance is very seldom an optional extra in South Africa. We know that owning a home comes with risks, and that to get a home loan the banks insist you have adequate r on the property. So, how do we make sure home insurance works for you?


Here are some ways to make sure your home insurance gives you the best value:


  1. Budget for potential rate hikes: When interest rates rise, your home bond repayments may also increase. To avoid the financial strain by building a reserve with additional funds added to your savings or flexi bond when interest rates are more favourable or lower. That way, you'll have enough funds to cover any increases that may arise over the years.


  1. Save costs with combined insurance: Some insurance providers, like Santam, offer insurance bundles that cover your building, contents, and car combined. This can work out be much more affordable than paying for three separate insurance products.


  1. Explore value-added services: Savings aren't always obvious from your monthly debit orders. Some insurance providers offer discounts, free services, and other great value additions. For example, Santam provides free value-added benefits like home emergency assistance, roadside assistance, and home drive assistance, ensuring you're taken care of in various situations with ease.


  1. Shop around for affordable home insurance: Most banks require homeowners to have property insurance before extending a bond. However, after moving in, you might not have given your insurance premium a second thought. It could be worth reevaluating your insurance and comparing quotes from different companies to find a more affordable home insurance Did you know, you're not obligated to stick with the original insurance company, even if it's the one provided by the bank who gave you the loan.


  1. Up your excess. One smart move to save on your monthly insurance costs is to consider increasing your excess. Basically, by opting for a higher excess amount, you can potentially lower your monthly insurance premiums. Just remember, it's essential to make sure you can actually afford to pay that excess in case you need to make a claim. So, find that sweet spot where you save some cash without putting yourself in a financial bind.


  1. Tailor-make your coverage. Your insurance should be as unique as you are! As your life changes, your insurance needs change too. If you've downscaled your home, moved to a new place, or sold off some valuable items, it's important to adjust your insurance coverage accordingly. By doing so, you might find that your monthly premiums become more budget-friendly and personalized just for you.


  1. When in doubt, speak to your insurance broker. If you have a broker acting on your behalf (or not) and you're having a tough time affording your home insurance premiums, don't hesitate to contact your insurance provider. They could have some tricks up their sleeve to help you out. They might be able to offer you a more affordable policy or give you advice on how to reduce your premiums. It's always worth a conversation to see what options are available.


In conclusion, by shopping around for affordable home insurance, preparing for potential rate hikes, and customising your policy to fit your needs, you can tackle the challenges faced by many South African homeowners, including those pesky interest rate hikes. Switch to Santam, South Africa’s leading short-term insurance company.


How to find the right home insurance provider that gives you more value, and understands your needs


Now that you know how you can save and considering switching your home insurance providers, here are some ways to help you navigate and find you affordable home insurance in South Africa.


The best place to start is to shop around and compare quotes from different short-term insurance companies.


Our is to find a short-term insurance company that has good peer and customer reviews, that is committed to good service, and that has a legacy of trust while still having an eye on the future. It might sound like the Goldilocks of insurance companies, but the “just right” insurance provider is out there if you look.


leading company in South Africa, Santam offers a range of property insurance options to suit different budgets and needs.


When comparing home insurance quotes, it's crucial to consider the cover provided by each policy. While a cheaper premium may sound appealing, you will need to be sure that the policy adequately covers your home and valuable possessions. After all, true peace of mind comes from having the right protection.


So go ahead, be proactive. Switch to Santam insurance and get more value, while having the flexibility you deserve!