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Personal Lines Insurance
Monday, March 1, 2010
Don’t get red carded

Those looking to score from the influx of World Cup visitors could be caught offside by more insurance snags than they realise.
Insurance pitfalls are not limited to damage caused by paying guests to household items, but cover a broad range of issues, including motor insurance and personal liability exposure to an extent that may come as a shock to those who think only in rand terms.
The warning comes from BJM Insurance Brokers, short-term insurance division of BJM Private Clients.
To assist those considering World Cup-related business opportunities, the BJM specialists prepared the following list of points to watch.
Any plan to rent out assets to World Cup tourists probably affects your insurance. Understand all insurance implications before making commitments.
Covers most likely to be affected are household contents, buildings, vehicles and public liability.
Insurance protects you under a certain set of circumstances. When circumstances change so should your insurance.
Letting and hiring out insured assets constitutes a material change in circumstances.
Failure to disclose a material change to your insurer could invalidate your cover, while proper disclosure may lead to increased premiums. Cover for house contents insures you and members of your family that normally live with you – not tenants and their belongings.
When tenants move in, house contents insurance normally excludes malicious damage caused by them while cover for theft only applies following violent and forcible access to the house.
The building sections of personal policies normally exclude claims for malicious damage while the buildings are let.
If you intend to transport soccer tourists as part of their accommodation package, it may be deemed that you are transporting fare-paying passengers. You may then need a Public Driving Permit (PDP) and may have to register your vehicle with the authorities.
Even with a PDP, your policy may exclude cover when your vehicle is used to transport fare-paying passengers. It may 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. If you lend your vehicle (with no question of remuneration), your visitors must have a valid driver’s licence that is acceptable in South Africa.
Legal liability provisions do not usually cover liability arising from the occupation of buildings and the renting of movable and immovable property. Personal legal liability cover excludes 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.
Willem Coetzee, CEO of BJM Insurance Brokers, notes, “The list is by no means exhaustive and insurance implications may vary depending on the type of cover. Policyholders should seek advice from a qualified insurance adviser.”
BJM Private Clients is a division of the Barnard Jacobs Mellet (BJM) financial services group. It offers stock broking, insurance broking, wealth management, trust and fiduciary services, asset management and corporate advisory.

Copyright © Insurance Times and Investments® Vol:23.3 1st March, 2010
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