Insuring against football fans

As South Africans prepare to welcome football fans for the 2010 World Cup, many homeowners are planning to rent their homes out to tourists. Although the prospect of making some extra money is exciting, the risks are often overlooked. Insurers believe many of their clients may be forgetting to check important details of their cover.

‘If you rent out your house or rooms in your house, you have to advise your insurance company,’ says Louise van Schoor, a broker at FSG Consulting. ‘If you don’t, it might be seen as non-disclosure by some companies and nothing will be paid because the contract will be cancelled.’ Standard cover applies only to the policy holder and members of the family normally resident.

With most companies, your standard household policy won’t cover theft by paying tenants and the visitors should have their own travel insurance to cover their belongings. Perhaps most worryingly, public liability might be excluded.

‘Public liability is very important,’ says Van Schoor. A letter sent to brokers by a leading insurance company stated, ‘If paying tenants are injured by something unsafe on the insured property or suffer food poisoning while renting the property, it could result in a major claim against the insured.’ Tourists can sue you from another country where liability awards may be much higher.

If you decide to hire your private motor vehicle to your tenants, a standard policy won’t cover that either. Standard vehicle insurance applies only if you lend your car (for free) to someone with a valid driver’s licence. Van Schoor recommends you contact your broker or insurance company to find out exactly what your policy will cover and what’s excluded.

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