It proves once again that short-term insurance with all its conditions, exceptions and limitations - the pitfalls - is not so simple.
We are currently discussing the Fire type Divisions and in Part 8 we discussed the Home Owners Division, namely the residential building and all structures of a household nature which may have been erected on the farmyard.
In this issue we focus on the Division Householders or Household Contents, which is once again limited to all items of a household nature.
Readers should take note that this division (similar to Home Owners) is subject to the averaging or under-insurance principle and items should therefore be insured at replacement value.
HOME OWNERS
Due to the extent of the cover and extensions under this division, we will have to discuss it in more than one article.
However, it is important to look at the definitions contained in the policy conditions to make very sure of what exactly is defined as residential dwelling contents:
All items of a household nature, while kept in the private dwelling and domestic outbuildings on the said premises, in the policy (it includes all items which would fall out should the house be turned upside down!) It includes, inter alia, clothing, jewellery, groceries as well as garden tools in the garage / outbuildings.
Personal possessions of visitors of the insured or co-insured person while in the private dwelling of the insured person, on condition that:
Such items are not otherwise insured (in other words, should the visitor have his own home owners insurance, he would have to claim against such insurance).
The liability of the insurer is limited, e.g. R2 000.00 or 2% of the insured amount (Santam Agri-policy).
Personal possessions of any servant employed by the insured on a full-time basis while such possessions are in the building as specified under Division Householders, subject to the following:
Loss or damage as a result of theft is excluded, unless the theft goes hand in hand with burglary in a material, visible and forcible manner.
The liability of the insurer is once again limited.
The policy often refers to the fact that liability is expanded to include co-insured persons. Co-insured persons include the spouse of the insured person as well as any other relative of the insured person and his/her spouse who may live with them.
Where the policy refers to the private residence of the insured person, it means the building of the private residence of the insured person of which
the construction, e.g. walls, is a brick construction and the roof is a corrugated iron roof; and the location, e.g. the name of the farm and the district, are reflected in the annexure to the policy.
The aforementioned factors are taken into account when calculating the premium, since a dwelling with a wooden construction poses a much higher fire risk while a dwelling in the close vicinity of an informal settlement poses a higher theft/burglary risk.
Contents are also defined as Household Goods and Personal Possessions of a diversified nature, which are the property of the insured/co-insured person or for which they are responsible, as well as fixed equipment and accessories (e.g. TV-dishes) belonging to them. However, fixed equipment and accessories belonging to the owner, as found in a rental home, are excluded.
Please note that emphasis is placed on items of a household nature - the PTO-shaft of the ground-nut harvester lying in the garage is therefore not included!
Buildings which qualify for cover in terms of this division are the same as discussed in Part 8 - Home Owners, namely the private dwelling of the insured and domestic outbuildings and do not include the store in which tractors, animal feed, etcetera are kept.
WHAT AM I INSURED AGAINST?
The same cover as against insured perils are provided as discussed in Pitfalls of short-term insurance - Part 8 : December 2015/January 2016, namely fire, lightning, special perils (storm, wind, water), theft, etcetera.
However, it is important to note the following limitations relating to burglary or any attempt thereat:
Burglary (or any attempt thereat) is excluded should the insured buildings be loaned, let or sub-let, unless it goes hand in hand with breaking in or out of the building by means of material, visible and forcible means.
In short it means that should a door be left ajar and should somebody walk in and take any items (e.g. handbag, camera, etc) and walk out, such an incident would not be covered in terms of the policy.
It is therefore important to note that cover in respect of theft relating to the contents of the holiday home of the insured person which is being rented out, is limited to theft after access to the building in a material, visible and forcible manner. Should the lessee disappear with that beautiful Pierneef painting, it will not be covered.
Theft (or any attempt thereat) from any domestic outbuilding is limited to damage or loss after material, visible and forcible breaking into or out of such building.
The 'disappearance' of the electric drill or grinder from the garage while it is left open, will also not be covered.
As in the case of Home Owners Division, certain Extensions are included in the policy, free of charge.
EXTENSIONS
Loss of or damage to the contents of fridges and freezers
- Accidental spoiling of the contents of the fridge or freezer in the insured buildings due to fluctuating temperatures, for instance when the servant switches off the power to vacuum the carpets and she forgets to switch it on again.
- Spoiling of food due to power deliberately being cut off by Eskom is not included.
- Damage to fridge or freezer (due to possible power fluctuations) is not included.
LOSS OF MONEY
Limited cover of R2 500.00 (two thousand five hundred rand) is applicable in respect of loss of or damage to money of the insured/co-insured person caused by an insured peril while inside the private dwelling of the insured, as specified in the annexure.
Theft of the money must once again go hand in hand with breaking into or out of the dwelling by material, visible and forcible means.
Amounts higher than R2 500.00, as well as money for business use (farming), must be insured under the Division Money, which we will deal with at a later stage.
ACCIDENTAL BREAKAGE OF MIRRORS AND CERTAIN TYPES OF GLASS
The accidental breakage of mirrors, glass tops of furniture and fixed glass which forms part of any stove or oven (e.g. a glass top stove on which a saucepan falls and it breaks).
MEDICAL EXPENSES
Medical expenses, except where a medical aid fund/other insurance is available, are insured up to an amount of R10 000,00 for accidental physical injury.
However, this cover is limited to injuries sustained by
- any person (excluding the insured/co-insured person or any person in their service) directly caused by a pet of the insured person (dog/cat/etcetera) being kept on the premises;
- any guest or visitor directly caused as a result of a defect in the buildings or premises;
SUMMARY
It is evident from the above discussion that insurance cover in terms of the Division Householders involves more than just cover against lightning or theft. In order to utilise all the benefits of this type of insurance, it is the duty of the insured person to acquaint him-/herself with the contents of the policy.
Contact your insurance advisor to explain the benefits of your short-term insurance policy.
In the next issue we will focus on the expansions which are included in this division of the policy free of charge, as well as expansions which can be obtained at an additional premium.
For purposes of this article the policy conditions of the Santam Agri-policy were used, which may differ from the cover, limitations and conditions of other insurers.