Renting your home out – are you covered?

Christelle Fourie, Managing Director of MUA Insurance Acceptances (MUA)

Next year brings with it a number of major international events, placing South Africa centre stage. With the hordes of tourists making their way to our shores, many people are seizing the opportunity by renting out their homes to those desperate to find a place to stay. In the final preparations that lead up to the adrenalin-filled year ahead, you need to be asking yourself how prepared are you? Are you and your home covered for the duration it is rented out?

“In the excitement people often overlook the most important details with their insurance cover,” points out Christelle Fourie, Managing Director of MUA Insurance Acceptances (MUA). “It is important to make sure that the insurance you take out covers you and your home comprehensively during the period.”

“In any instance when your home is rented out, you are essentially changing your private home into a commercial business, very similar to a guesthouse and this has serious implications on your personal insurance cover. The majority of insurance policies will not cover you against theft or damage caused to your property and home contents by your tenants. In addition, most personal legal liability policies exclude cover for legal claims instituted by paying tenants. Our biggest concern is that your exposure to liability claims is so much higher, as your tenants will be mostly foreign clients and often very wealthy individuals. If you fail to address these gaps in your insurance cover, you stand the risk of being financially crippled should you suffer a loss during the period your home is rented out,” adds Fourie.

Before making any plans you need to talk your broker about what you are covered for and what additional cover you will need to ensure you don’t get stuck footing an unexpected bill.

Here are some helpful tips on how to make sure you are fully protected:

• Contact your broker and ask whether the increased risk whilst renting out your private home, is covered in terms of your standard personal insurance policy;
• If not, ask your broker to conduct a full risk analysis in order to determine your insurance exposure during this period and to provide you with a quotation;
• Also approach the official leasing agent, who would be able to advise you on specialist covers that are available in the market;
• Always ask for all confirmation of insurance covers to be done in writing and sent to you;
• Ensure you understand the terms and conditions of your insurance cover, prior to suffering a loss;
• Should you arrange a special short-period cover, ensure your premiums are paid up prior to the start of the rental period.