Check your insurance cover before letting out your property to World Cup fans

Property owners who believe they can make rental profits off visiting soccer fans to the 2010 World Cup may find themselves up the creek without a paddle if uninsured damage is inflicted on their properties.

Thousands of South Africans are looking forward to a rental bonanza from soccer enthusiasts, but short-term insurance brokerage Glenrand MIB warns that uninsured losses could severely dent or even exceed any rental profits made.

"The problem is that the insured risk of your property and its contents changes if you open it to visitors who may not show due care to avoid damages," says Mary Mlambo, Glenrand MIB's national marketing manager for personal product solutions.

"Unfortunately soccer fans worldwide have a reputation for hooliganism and the risk to your property is very real. Typically, owners would insist on deposits from the visitors but this may be woefully insufficient to cover damages, and the chances of recovering the costs of those damages after they have left the country, or while they are still here, are extremely slim.

"Your best option is to declare the changed risk to your broker, to accurately scope cover for your exposure and avoid possible later repudiation of any claims by the insurer. This will lead to a re-assessment of the risk and adjustment of premiums.

"Alternatively, you could exclude certain risks from your cover, meaning you accept the risk yourself and will not have a claim for those risks in the event of a loss.

"You could also accept a higher excess (the initial portion of a claim that you would have to pay) or you could cap the payout on specified risks in order to moderate the premiums. The idea is to ensure that you are properly covered, or your risk is reduced and any claims you may have are not repudiated."

Sunday Argus

Posted at 09:24AM Jul 13, 2009 by Editor in Market  |