Rebuild cost vs market value

Building insurance is based on what it would cost to demolish and rebuild your home from scratch — not what you could sell it for. Market value includes the land, which cannot burn down or flood. A R2,000,000 property might have a rebuild cost of R1,200,000–R1,500,000. Insuring for market value means you are paying premiums on a figure that is 30–50% too high. Insuring for less than rebuild cost — a common mistake — leaves you underinsured in a total loss.

Sectional title — what your body corporate covers

If you own a sectional title property (apartment or townhouse), your body corporate's master policy insures the external structure, common areas, and shared services. You are responsible for insuring internal improvements: your kitchen, bathroom fittings, built-in cupboards, flooring, and any structural changes you made. This is typically 30–50% of what a full freehold rebuild would cost — the 0.4× multiplier used here is a conservative estimate. Confirm the exact split and what the BC policy covers with your trustees before buying your own policy.

How SA building insurance rates work

Building insurance in South Africa typically costs 0.1–0.3% of rebuild/replacement value per year. Contents insurance is slightly higher at 0.2–0.4% of contents value per year. Your actual premium depends on the location, security features, claims history, roof construction, and the insurer. The rates used here (default midpoint: 0.20% building, 0.30% contents) represent the midpoint of the typical SA market range. Use the Advanced settings to adjust for your own risk profile.

Assumptions applied

• Build costs per m² are 2026 estimates sourced from SAPAC and LocalPros data: Standard R12,000/m², Mid-range R16,000/m², Premium R22,000/m².
• The sectional title multiplier of 0.4× is a conservative estimate for internal fit-out only. The actual figure depends on your body corporate's policy schedule.
• Premium rates use a range of 0.5×–1.5× the midpoint rate, reflecting the spread across SA insurers for similar properties.
• Contents value should reflect today's replacement cost — what it would cost to replace items new, not what you paid originally.

What this calculator doesn't account for

• Does not account for location risk factors: flood plains, wildfire zones, and high-crime areas attract loading above the standard rate.
• Roof construction type (IBR, tile, thatch) significantly affects premiums — thatch can be 2–4× the standard rate.
• Does not model all-risks / portable possessions cover, vehicle contents, or high-value item schedules (jewellery, art).
• The rebuild cost estimate does not account for unusual design complexity, heritage status, or non-standard materials.