According to statistics from The World Factbook, approximately nine out of 10 South African homes have three generations of a family living under the same roof.

With the rising cost of living and soaring house prices, more South Africans are choosing to live at home together with other members of the family.

However, consumers fail to realise that choosing to share their home with other family members can have a big impact on their insurance.

This is according to Christelle Fourie, Managing Director of MUA Insurance Acceptances, who says homeowners often do not fully understand the implications of choosing to live in a home with multiple family residents, such as grandparents, aunts and uncles, cousins and their respective children.

In doing so, she says they expose themselves unnecessarily to the risk of an insurance claim rejection or a reduced pay-out as a result of underinsurance.

She says homeowners need to ensure that they revisit their policies and update these if necessary. This includes taking into account assets and valuables in the home, as well as the additional use of vehicles by other family members.

Fourie lists a few of the common mistakes that people make when changing their living arrangements or home occupants:

Underinsurance of household contents

Living in a household with several family members often means that they bring their own assets into the home.

“Should the contents of the home be more than the value of the cover in place, the claims will not be fully paid out to compensate for any loss that may take place.”

Fourie says a big problem many homeowners face when insuring the contents of their home is failing to insure the contents for the correct and updated replacement value.

She says most people tend to take out a home contents insurance policy and simply renew it every year without taking the necessary steps to update their level of cover, despite having bought new contents for their home.

Fourie says another common problem with regards to insuring home contents is forgetting to take price inflation into consideration.

“A piece of electrical equipment that cost R5 000 ten years ago could now cost twice that to replace.”

This is why it is so important to conduct regular valuations of home contents and to provide this updated value to the insurance provider to ensure adequate cover, especially when it comes time to provide accurate values for any expensive items such as jewellery, she says.

Car insurance

According to Fourie, another consideration that policyholders need to take into account is that any additional family members using the family vehicles may not necessarily be covered by the insurance policy. She says policyholders place themselves at risk of claim rejections or additional excesses if an unregistered driver is in an accident.

Home extensions

Fourie says if a policyholder makes any alterations or extensions to the property, this will have a direct impact on the insurance policy.

“Any form of upgrade to the property in order to accommodate family members moving in will mean the existing home insurance policy will need to be reviewed to reflect this.”

She says insurers must also be notified when home renovations are undertaken as most policies exclude cover while the building is under construction.

Regular maintenance

Negligence and lack of regular maintenance may increase the chances of claim repudiations, says Fourie.

The reality of having more people living under one roof is that the home is more susceptible to wear and tear, or damage, she says.

Fourie says most homeowner’s insurance policies will only cover damage caused by unforeseen events, and regard home maintenance as the responsibility of the homeowner.

Thus, any claims determined as a result of poor maintenance or neglect are most likely to be rejected, she says.

“Many homeowners may choose to share their homes with other family members assuming that their insurance claims won’t be affected. However, it is vital that policyholders make sure that the type and amount of insurance cover that they have will adequately cover any changes to the living arrangement and home itself.”

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