Home insurance: buildings, contents and your bond

What is the difference between buildings and contents insurance?

Buildings insurance covers the structure of a home: the walls, the roof and the fixed parts of the building. Contents insurance covers what is inside: furniture, appliances, clothes and electronics. They are different kinds of cover, and a policy can include one, the other or both.

Olvian is not an insurer, broker or financial services provider. It passes a person's request to licensed providers, who pay Olvian a fee and contact the person. This guide explains how the two kinds of cover are usually separated and what the law says about bonds. It does not say what you should buy.

Where is the line between the two?

The line is drawn in the policy wording, not in a general rule. Most policies treat the structure as buildings and anything you could pick up and take with you as contents. Items in between, such as fitted cupboards, built-in appliances, carpets, solar panels, garden walls, outbuildings and swimming pools, are where policies differ.

That is why the wording matters more than the label on the quote. Ask the licensed provider who contacts you to point to the clause that says which section each of those items falls under. Then check that the answer is written in the policy schedule.

Home policies are insurance under the Insurance Act 18 of 2017. Table 2 of Schedule 2 to that Act sets out the classes of non-life insurance business, and describes the property class as covering "damage to or loss resulting from the possession, use or ownership of property". A policy that covers your home and belongings falls in that class.

If I have a bond, must I have buildings insurance?

Often, yes, because the lender can ask for it. Section 106(1)(b)(i) of the National Credit Act 34 of 2005 allows a credit provider to require a consumer to maintain, in the case of a mortgage agreement, "insurance cover in respect of the immovable property that is subject to the mortgage, not exceeding the full asset value of that property".

Two limits sit beside that power:

• It must be reasonable. Section 106(2) says a credit provider must not offer or demand insurance that is unreasonable, or at an unreasonable cost, "having regard to the actual risk and liabilities involved in the credit agreement".
• It is about the mortgaged property. The power in section 106(1)(b)(i) concerns the property that secures the loan. Read your bond agreement for what it actually demands.

Your credit agreement is the document that says what you must maintain. If you cannot find the clause, ask the lender to point to it.

Can I choose my own insurer if I have a bond?

Section 106(4)(a) says that if the credit provider proposes that you buy a particular policy of credit insurance under subsection (1) or (3), you "must be given, and be informed of, the right to waive that proposed policy and substitute a policy of the consumer's own choice, subject to subsection (6)".

Subsection (6) lets the lender ask for two written directions if you substitute: one allowing it to pay the premiums on your behalf and bill you, and one to the insurer naming the lender as loss payee up to the settlement value of the debt. Section 106(5)(d) adds that where the lender arranged the policy, it may be a loss payee only up to the settlement value, and any remaining proceeds must be paid to you.

In short, the Act gives you a right to substitute a policy of your own choice, within those limits. Whether a particular policy meets the lender's requirements is something the lender and the insurer sort out. The licensed provider who contacts you can say what they would give your lender.

What must an insurer tell me before I buy?

The Policyholder Protection Rules (Short-term Insurance), 2017 set out what insurers must disclose. Where an insurer gives you a quotation that purports to give detailed information about a specific policy, or sells to you by direct marketing, Rule 11.4.2 requires, among other things:

• the nature and extent of the policy benefits and a description of the risk insured;
• any charges or fees, and any commission or remuneration payable to an intermediary;
• any excesses, the circumstances in which they apply and what happens if you do not pay;
• how the premium is set, how often it is payable and any increases;
• cooling-off rights and how to use them;
• concise details of significant exclusions or limitations;
• any obligation to disclose material facts, and the consequences of not doing so;
• how to complain, including the contact details of the relevant ombud.

Rule 11.1 defines "significant exclusion or limitation" to include any limit on the amount of cover and any waiting period. After the policy starts, Rule 11.5.1 requires the insurer, no later than 31 days after inception, to give you the information in writing, including evidence of cover, comprehensive details of all exclusions and limitations, and the representations you made that the insurer regarded as material. Rule 11.5.3 adds a copy of the policy within the same 31 days.

Why does the insurer ask about my home?

Insurers ask questions because the answers shape the terms they offer. Typical questions are about where the home is, what it is built from, how it is secured, who lives in it and whether you have had losses before.

Answer honestly and completely. Rule 11.4.2 says the insurer must tell you of any obligation to disclose material facts and what happens if you do not. If you are unsure whether something matters, say so and ask the provider; a fact you leave out can become a reason to dispute a claim later.

Can I change my mind after I buy?

Rule 4.2 gives a cooling-off right. If the policy term is longer than 31 days, and no benefit has been paid or claimed and no insured event has occurred, you may cancel within 14 days after receiving the policy contract by giving the insurer a cancellation notice. Rule 4.3 says the insurer must refund premiums paid, less the cost of any risk cover you actually enjoyed, and Rule 4.4 requires it to act on the request within 31 days of receiving your notice.

Cooling-off applies to new policies and to changes you ask for. It is not a general right to cancel whenever you like. Cancelling later is governed by the policy and by Rule 19, which covers termination.

What should I do with all of this?

Use it as a list of questions for the licensed provider who contacts you:

1. Which items count as buildings and which count as contents under this policy?
2. Does the policy meet my bond lender's written requirements? Can you confirm that in writing?
3. What are the significant exclusions, limits and excesses?
4. What happens if I give a wrong answer by mistake?
5. How do I use the 14-day cooling-off right?

Our guide on under-insurance and the average clause covers the next question most people have, which is what happens if the amount insured turns out to be too low. The guide on claims, excesses and complaints explains what happens when you claim.

Sources

Checked on 31 October 2026. Olvian is not a financial services provider and this guide is information, not advice.

• National Credit Act 34 of 2005, section 106: credit insurance, consolidated text on LawLibrary.
• Policyholder Protection Rules (Short-term Insurance), 2017, Rule 4: cooling-off rights, Government Notice 1433, Government Gazette 41329, 15 December 2017, as amended by Notice 996, Government Gazette 41928, 28 September 2018.
• Rule 11: disclosure
• Insurance Act 18 of 2017, Schedule 2, Table 2: classes of non-life insurance business
• Financial Sector Conduct Authority: consumer page, including how to confirm that a company is licensed.