Renting out to earn extra income during the holiday

Marius Neethling, Personal Lines Underwriting Manager at Santam said it is “crucial for homeowners to check their policies to make sure they are adequately covered, to make sure their policies are up to date, and to ensure that there is nothing in the rental contract and anywhere else that could end up in a claim being delayed or repudiated.”

Burglary, vandalism and burst or leaking water pipes are some of the most common occurrences when homeowners are away.

“Sometimes people mistakenly think they are automatically covered in such cases when really they are not,” said Neethling. Santam offers options for its policyholders who want to let out their homes over the holidays: “If you’d like to rent out the extra rooms in your home, you can take an additional optional cover for accidental damage to your household contents, e.g. if your plasma television falls and breaks we’ll provide cover for it,” said Neethling.

Santam also offers an option of a limited bed abd breakfast cover in the home which you permanently live in and this applies if three or fewer bedrooms of your home are rented out to guests.

Letting your property considerably increases your risk of loss or damage, and you are exposed to liability claims from paying guests. “While you are not automatically responsible for injuries to people living in your house, you do need to discuss the matter with your insurer or intermediary before accepting any kind of liability,” said Neethling.

Santam also automatically provides an extra 10% cover on household contents between 15 December and 31 January annually, free of charge. “This is our way of giving our policyholders extra protection over the festive season,” said Neethling.

Property owners who are renting their properties out over the festive season, or are just generally letting their premises should take note of the following:

When renting out your home

Inform your insurer and check the conditions of your insurance policy as to what the requirements are when renting out your home.
Clarify upfront all responsibilities and liabilities of the home-owner and that of the tenant.
Your intermediary should be invaluable in making sure everything is in order.
When getting a house-sitter:

When choosing a house-sitter, preferably arrange to have a friend or family member look after your house while you are away. If this is not possible then make sure to check the sitter’s credentials beforehand.
Lock your valuable possessions away in a safe place.
Clarify with your house-sitter upfront as to what their responsibilities are and what they would be liable for. Get this written down and make sure, with the help of your intermediary, there are no insurance policy implications.
Santam does provide cover for theft from your premises when a sitter is looking after your house, however your house contents must be insured.
Please advise the sitter to ensure that the alarm is activated or safety gates are locked whenever he/she leaves the premises as this may be a condition on your insurance policy, which can lead to a claim being repudiated if not adhered to.
Empty home:

If there is no one house-sitting your home this festive season and you plan to lock it up and go, let your security company know as they are often happy to arrange extra security to ensure your house is safe and secure.
Supply your security company with a contact number of a friend or family member in case your alarm goes off, as it won’t help for them to ring you, if you’re in another town.
Arrange for a reliable neighbour, friend or family member to pop around to your house to make sure all is in order on a regular basis. 
Before locking up your house and heading to your holiday destination, remember to
Switch off all your lights. You can leave a side lamp on to deter opportunistic
Make sure your house is locked up and secure
Test and then make sure that your alarm is switched on
Pack your car behind closed doors as you don’t want your whole neighbourhood to know that you willl be away
Switch off your geyser to save electricity.
Make suitable arrangements for your pets.
Gerald Sutherland, an intermediary from Watney-Vineyard Insurance Brokers, advises that using your personal property for commercial gain may not be covered by your personal insurance policy. “It is important to have your broker help you understand the risks you face and consider appropriate solutions, including but not limited to, additional insurance cover.  If you rent your property out to earn extra income, it would be advisable to consider a specialist hospitality or commercial type policy to cover your risks.