A home owner's worst nightmare in a distaster that leaves them destitute. A fire or flood for instance. One of the questions they struggle with, apart from how to replace the goods they lost, is 'what happens to my mortgage?'. AIG South Africa has come up with a solution: mortgage insurance for up to six months.

AIG South Africa, which will rebrand itself to Chartis in October 2009 as part of a global restructuring, says the new disaster mortgage insurance product is different from traditional home owners' insurance. For starters, it provides policyholders with mortgage reimbursement in the event that their homes become uninhabitable for more than 48 hours up to a maximum period of six months.

"Most people have building and household insurance, but what happens if they have to move out of their homes because of fire, flood or another disaster that makes their homes unliveable?" said Wally Gast, AIG's personal lines manager.

"It can be very costly to find alternate accommodation for a whole family and although their insurance may cover these costs, they are obliged to continue paying their mortgage even though they are not occupying the house or flat."

Traditional household or home insurance usually covers only the replacement of insured household goods while building insurance covers the cost of the repairs to the structure.