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Householders' Insurance
Monday, August 1, 2005
Couple of ideas

It is a distinct trend these days, good or bad, of increasing numbers of couples staying together in unmarried bliss — in various combinations of this and that. As such the marriage contract cannot be used as a foundation for legal matters.

And that includes personal insurance. Couples need to make sure their joint assets are properly covered.
Gari Dombo, MD of Alexander Forbes Personal Insurance Services, list a few pointers:
• in whose name has the insurance policy been issued? Where people are cohabiting or sharing a house it is important the policy is issued in the joint names of the partners, or at least that the interest of the other partner is acknowledged on the policy. This must not be confused with the standard wordings whereby most family members are included on the insured’s policy, because this assumes a marriage contract.
• consider the issue of underinsurance. By bringing a partner’s additional contents into the household obviously the joint value of the assets will increase — even double. The sums insured on the policy must be adjusted, otherwise the underinsurance clause will reduce effective claims payments.
• consider the question of ‘insurable interest’. This may have implications in the event of a claim, even if the level of cover is adequate. Establish and agree on the extent of the insurance company’s liability;
• take cognisance of any possible increase in risk afforded by the arrival of additional household contents. For example, expensive jewellery, firearms, or
• many of the above issues and more may be affected by the principles of disclosure. It is the duty of the insured to disclose material information to the underwriter to enable the him to assess the risk correctly.

“While insurers are generally relaxed in issuing policies in joint names, it remains the duty of the client to disclose this change in the risk profile, and to ensure cover is increased adequatrely,’ says Mr Dombo.

Copyright © Insurance Times and Investments® Vol:18.4 1st August, 2005
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