In South Africa, the answer to this is pretty obvious. With our astronomical
burglary and house-breaking rates, it would be very foolish not to have a
comprehensive insurance policy that covers your home and its contents. Having
survived a housebreaking physically, you also want to be able to survive it
financially, by being able to replace the items that you have lost without
having to dig into your life savings to do so. Or to avoid the financial worst
case scenario of not being able to replace them at all, leaving you in a
situation where you no longer have the possessions that you have worked so hard
to accumulate.
On top of this, accidents can happen. Your home could catch fire, it could be
flooded, or that big oak tree in your garden could fall on your roof in a
violent thunderstorm (particularly if you live on the Highveld).
These contingencies represent a serious financial risk, which you are
well-advised to plan for. The best way of doing this is to take out
comprehensive household insurance. For a relatively small premium every month, you'll
have the peace of mind of knowing that if your house is burgled, or the building
or contents are lost or damaged in an accident, you'll be paid out enough money
to repair or replace them.
Not only this, but if you apply for a home loan, it becomes mandatory to have
insurance on your property, to cover serious loss that will affect your ability
to repay your home loan. Financial lenders need to know that if your buildings
are destroyed in some catastrophic accident, an insurance policy will cover the
outstanding amount that you owe.
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