FANews
FANews
RELATED CATEGORIES

Get insured…

07 December 2004 Angelo Coppola

Cre8, the research and development arm of Alexander Forbes Management Services, has introduced a property owner and landlord insurance solution, dubbed Natsure-Accommod8.

The current low interest rate and disappointing yields in other investment markets have encouraged investors to invest in South Africa's currently high-yielding property market, particularly in the buy-to-let market.

The trend to invest in property has resulted in changing needs in insurance buying patterns, leading to a need for the protection of the revenue generated from property rentals.

Grant Small, head of research and development at Cre8, touched on some legislation, such as the Rentals and Housing Act of 1999 and the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE) of 1998 that prevents landlords from evicting defaulting tenants without a court order.

Obtaining a court order could take months, and rental defaults could result in the property owner loosing a substantial amount of money from the loss of rental income, legal fees and interest payments.

Furthermore, since landlords are responsible for the costs of municipal services supplied to their tenants, it may also result in the property owner facing expensive water and electricity bills, which may have run up during the default period.

This may not only result in a financial exposure in having to settle the outstanding amount but also result in delays in the transfer of property, should the owners be selling the property.

"These are just a few of the risks which lead to a need for a flexible insurance solution to adequately address risks faced by property owners and protect them from the loss of revenue generated through their property investment," says Small.

"While rental income is taxable, the costs incurred to protect and preserve property are tax deductible," he adds.

Quick Polls

QUESTION

How confident are you that insurers treat policyholders fairly, according to the Treating Customers Fairly (TCF) principles?

ANSWER

Very confident, insurers prioritise fair treatment
Somewhat confident, but improvements are needed
Not confident, there are significant issues with fair treatment
fanews magazine
FAnews June 2024 Get the latest issue of FAnews

This month's headlines

Understanding prescription in claims for professional negligence
Climate change… the single biggest risk facing insurers
Insuring the unpredictable: 2024 global election risks
Financial advice crucial as clients’ Life policy premiums rise sharply
Guiding clients through the Two-Pot Retirement System
There is diversification, and true diversification – choose wisely
Decoding the shift in investment patterns
Subscribe now