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Will it be vacation or staycation this festive season?

16 November 2020 Old Mutual Insure
Christelle Colman, Insurance Expert at Old Mutual Insure

Christelle Colman, Insurance Expert at Old Mutual Insure

Relative risks of staying at home or going away this year

Despite Covid-19 lockdown restrictions largely lifted in South Africa, the threat of a second wave are seeing many South Africans review or even put off plans to travel this holiday season. Add to this lost jobs, reduced incomes and ongoing personal infection concerns and December 2020 is likely to see a lot more South Africans stay at home. On the flip side, for those still employed, less busy roads, uncrowded beaches and restaurants, lower-prices and more readily available accommodation and absence of hordes of international travelers in South Africa’s key tourist destinations might make December 2020 the ideal time to take that long-awaited break.

Whether it’s vacation or staycation this December, from an insurance perspective, South Africans should be aware that each come with their own set of risks. Understanding what these risks are, and taking the time to cover these will, “make the difference between a truly relaxing and re-energising holiday, or a stress-filled silly season capping off a terrible year,” says Christelle Colman, Insurance Expert at Old Mutual Insure.

Vacation
While roads are likely to be less busy this year, it is still a good idea to have your car serviced – and safety checked – before heading off on that long drive to the bush or coast. It is also a good idea, “to phone your vehicle insurer and check the detail of your roadside assistance package,” says Colman. Does this cover jump starts, tyre changes, locksmith call outs and key replacement, as well as towing, storage, vehicle hire and emergency accommodation, for example? All of these are important if you are travelling long distances through isolated parts of South or Southern Africa.

If your roadside assistance package is light on a few of these essentials it might make sense to, “bump up your vehicle insurance cover temporarily for the holiday season,” advises Colman. “You don’t want to be negotiating towing fees or storage costs on the side of the road in the middle of nowhere with people you don’t know and can’t trace,” warns Colman. Either way, never set out without a fully inflated spare wheel – or two if you are going off the beaten track – as well as chevrons, a car jack and a wheelnut spanner. Make sure you have a drinking water supply and that the roadside assistance numbers of your insurer and medical aid are in your phone.

It is also a good idea to have Waze or Google Maps on your phone, especially if travelling to unfamiliar parts. If you are going long distance, “get into the habit of switching your phone off when not in use so that the battery is not flat when you need to use it most,” advises Colman. Unattended homes are also a prime target for criminals during holiday time. Homeowners unable to get a house sitter should, “install timers on strategic interior lights and have day-and-night bulbs on exterior lights,” advises Colman. It’s also a good idea to have a neighbour or friend check the house from time to time, collecting mail and reporting any damage. If pets left at home are being attended to by a minder, or a gardener is coming once a week to do the lawn, “it’s a good idea to show them how to check for leaking geysers, burst pipes, or malfunctioning alarms or electric fences,” says Colman.

Then, if home-assist is not part of your insurance cover, “have someone on hand who can attend to these issues in your absence,” she adds. Either way, it’s a good idea to switch off water mains, geysers, stoves, all electronic equipment, non-essential plugs and any other unused household infrastructure when you go away.
It is critical, however, that alarms and other security measures are fully operational while you are away as many burglary policies, for example, will not pay out if the security arrangements listed in the policy documents were not working at the time of loss. Storms, lightning strikes, power failures, as well as sticks and other debris on electric fences can all compromise security arrangements. Householders should be sure they have, “plans in place to manage these eventualities as they occur - even while they are away,” warns Colman.

Staycation
While staying at home might initially appear to present far less bother, expense or risk, “since you’ll still be on holiday, your altered and much more leisure-focused behavior patterns also present risk,” says Colman. Since you’ll most likely be entertaining more, taking part in more local leisure activities and shopping much more – booking and buying out-of-the-ordinary experiences mostly online, “the risk of identity theft increases over the silly season as spending footprints change and become more frequent,” says Colman.

Entertaining at home more, or perhaps having friends or relatives staying over in your guest room or cottage, presents policyholders an opportunity to examine the personal liability detail of their general household policy – and augment this with separate personal liability cover. This is especially important if you have overseas guests or high net worth individuals coming to stay. Increasingly, “earnings lost as a result of injury are included in personal liability claims,” warns Colman. If injuries sustained at your home result in permanent job loss, “claims could soar into the hundreds of millions in the case of certain individuals,” she adds.

Since home invasions increased during lockdown, “we know that criminals target residences when people are at home, especially when entertaining,” says Colman. When having guests over, don’t advertise the fact. Try to park all the vehicles on your premises where they can’t be seen from the street. Encourage guests to use a taxi hailing service, like Uber, if they can. This is also better from a drunk driving perspective. While entertaining outside in summer is a South African tradition, home owners should still make an effort to lock all doors not visible from the garden, ensure the electric fence is functioning and all perimeter entrances remain closed or monitored at all times.

People with holiday homes who may choose to stay at home this year or who may not be able to afford to travel to their beach cottages or bush hide-aways, might decide to rent these out for additional income in these tough times. People renting a home out privately, via an agent or a digital rental platform like Airbnb, should understand that their risk profile changes the moment they rent a second home to third parties.

Theft, property damage and property owners’ liability risk, for example, all increase dramatically. Most standard homeowners insurance policies will in all likelihood, “not cover the vast majority of incidents that may occur when a rarely used family beach cottage is suddenly rented to strangers,” warns Colman. Even though platforms like Airbnb include an insurance element, “policyholders are advised to understand the details of this cover, especially any gaps in this cover – like personal liability limits – that might need to be augmented depending on the nature and financial worth of your tenants,” says Colman.
Coverage terms might also change – or fall away - depending on the normal use of the property. If the property rented via Airbnb is a residential property, for example, used to supplement the customer’s income, the liability will be covered. If, however, the customer is a property owner whose sole business is the owning and letting of properties, it is considered a commercial risk and the personal liability policy will not provide cover.

Colman also advises that people having guests to stay at their home during the holiday or renting out their unused holiday home to strangers this year, should “take out specific, temporary, guest negligence cover.” People using a strange home are generally not as aware as the owners of how best to treat it. Accidents and breakages are more likely. While malicious damage is also generally excluded from general homeowners policies, it is extremely necessary when renting out second homes. This is especially so over the silly season when, “renters may be drinking, partying, braaiing and entertaining other unauthorised third parties during what is traditionally a very festive time of the year,” cautions Colman.

Useful rule of thumb
While much of this sounds rather complex – and quite scary – Old Mutual Insure’s Colman believes, “the easiest way to understand and manage these risks and do the right thing is to ask your insurance provider three simple questions.
What happens when my short-term paying guest:
• Burns down my building?
• Falls down my steps and sues me?
• Forgets to lock my front door and I get burgled?

“If the answer to any of these questions is ‘you’re not covered’, then you may want to take out additional insurance,” advises Colman. Either way, whether going on holiday or staying at home this festive season, it is always advisable to, “get any changes to the way that you are using your property or that may impact your risk profile on record - and then obtain your insurer’s consent in writing confirming that cover is indeed in place,” concludes Colman.

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