RDP housing insurance has arrived in South Africa, giving families supported by the government subsidy housing scheme vital protection against unforeseen financial circumstances.
The government subsidy housing scheme has changed the lives of millions of South African families with the provision of free housing - commonly known as RDP homes - to qualifying citizens. Government-funded homes give those who would otherwise never be able to afford a house the chance to enjoy the benefits of property ownership. But while RDP houses have undoubtedly been positive, South African communities are still rife with stories about families who are under crippling financial strain after receiving their property.
"When beneficiaries of low-cost homes experience loss or damage to their properties, they face a heavy financial burden," says Bangi Makopo, co-founder and director at Social Housing Initiative Cover (SHIC), a pioneering low-cost housing insurance company. "Most RDP families don’t have access to spare money, so if something goes wrong with their new house, they can’t afford to fix it. And if you don’t maintain a property more things tend to go wrong, and you end up in a negative cycle from which you can’t escape."
The government subsidy housing scheme has changed the lives of millions of South African families with the provision of free housing - commonly known as RDP homes - to qualifying citizens.
SHIC offers affordable low-cost housing protection against this devastating scenario. For only R100 per month, RDP homeowners can now make sure that if they experience theft, fire or material building damage, they will be able to pay the cost of repairs.
The issue of low-quality RDP buildings is widely recognised across South Africa. For example, early in 2019 Human Settlements Minister Nomaindia Mfeketo stated that the government had spent R1.1-billion over the previous five years to repair badly built RDP houses. Worryingly, this figure does not include costs from three key provinces: Gauteng, Mpumalanga and the Northern Cape.
The SHIC offering is therefore a huge development for RDP families - especially since in 2019 many RDP houses continue to be built to a low structural standard.
"There are still a lot of reports from low-cost homeowners about poor quality, with specific mentions of weak walls and roofs," explains Makopo. "This is very unfortunate and can undermine the whole principle behind government-subsidised housing. When a building is structurally weak to start with, it is vulnerable to natural forces like rain and wind. The weakness and vulnerability grow a hundred times when owners can’t afford to repair cracks, leaks and other kinds of damage."
At R100 per month the SHIC insurance product offering is affordable for most low-cost homeowners, and gives protection against core property damage, excluding household contents and renovations made to the house after it was handed to the owner. Policyholders also have the option to take up additional, affordable cover for household contents, as well as a funeral plan.
"We’ve worked very hard to develop this product for South African communities," says Makopo. "It services families that meet government’s criteria for social housing, as well anyone else with a home valued under R150 000. The cost of the premium is as low as we could possibly make it. This has been a big point of focus for us, along with making sure the process of getting cover is simple, and fast."
Interested families can contact SHIC via its social media pages, but the company puts most of its operational energy into servicing new and existing clients via a simple phone call. The process is as easy as calling 010 900 1346. A friendly consultant then guides homeowners through the information they need to supply and sends them a quotation that meets their needs. After that, the policy is activated.
"The response since we launched in July this year has been incredible, right across the country," concludes Makopo. "This is clearly an urgently needed product because it protects our most vulnerable families against the very real risk of a financial nightmare. Anyone worried about this happening to them should call us immediately."
About SHIC Low Cost Housing Insurance Cover
Social Housing Initiative Company (SHIC) offers affordable, low-cost housing insurance to South Africans who qualify for government-subsidised housing. SHIC was developed by Kunene Makopo Risk Solutions, in partnership with Afribiz Invest, and is underwritten by the Constantia Insurance Company.
Applicants for SHIC must own a property with a market value of under R150 000 and/or meet South Africa’s national housing subsidy scheme criteria, including: