Renting to World Cup visitors affects insurance

2010-02-16 11:37

Renting out assets to World Cup tourists will probably affect the

owner’s insurance, BJM Insurance Brokers said today.

“Failure to disclose a material change to your insurer could

invalidate your cover, while proper disclosure may lead to increased premiums,”

BJM said in a statement.

Insurance cover most likely to be affected included household

contents, buildings, vehicles and public liability.

“Insurance protects you under a certain set of circumstances. When

circumstances change so should your insurance,” BJM said.

Letting and hiring out insured assets constituted a material change

in circumstances.

Cover for house contents insured the owner and family members –not

tenants and their belongings.

“When tenants move in, house contents insurance normally excludes

malicious damage caused by tenants while cover for theft only applies following

violent and forcible access to the house.”

BJM said the building sections of personal policies normally

excluded claims for malicious damage while the buildings were let.

If soccer tourists are transported as part of their accommodation

package, it may be deemed that fare-paying passengers were being

transported.

“You may then need a Public Driving Permit (PDP) and may have to

register your vehicle with the authorities,” BJM said.

“Even with a PDP, your policy may exclude cover when your vehicle

is used to transport fare-paying passengers.”

In fact, it might be necessary to amend the vehicle’s class of

use.

“If your visitors use your vehicle, this may be construed as hiring

out the vehicle; which could invalidate your cover.”

According to BJM, if a vehicle is lent (with no question of

remuneration), the visitors must have valid driver’s licences.

BJM said legal liability provisions did not usually cover liability

arising from the occupation of buildings and the renting of movable and

immovable property.

Personal legal liability cover excluded liability arising from the

conduct of income-earning activities.

“If a foreign visitor claims against you, the claim could be in US

dollars, sterling or euros.

“This would inflate the sum in rand terms, making it advisable to

increase the insured sums set out in your policy.”

The list was by no means exhaustive and insurance implications

might vary depending on the type of cover, BJM said.

 


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