Once upon a time in South Africa real estate was one of the best investments you could make and many who had the capital to spare purchased one or even a few “gold mines” to rent out. Others simply wanted their little piece of paradise by the sea or in the country side with the added benefit of being able to rent it out.
But times, the real estate landscape and the economy have changed and suddenly many find themselves with property that is left vacant for a considerable amount of time. Unfortunately, you are still left responsible for the payment of your mortgage, rates and taxes as well as maintenance on your property. A “vacant” property status impacts your insurance coverage.
Your property is considered to be “vacant” if it is left unoccupied for 60 consecutive days. If this occurs or you expect that this could occur soon, you need to contact your insurance broker in order to look at an alternative solution. If you do not contact your insurance broker, you could run the risk of voiding your home owners insurance.
This is due to the fact that an unoccupied property poses a much larger risk of theft, vandalism, fire and even weather related perils. Unfortunately, even when an alternative arrangement can be made with your insurance company, this extra risk inevitably impacts your premiums as well. All options should be discussed with your insurance broker.
There are certain instances/situations many don’t even consider as possibly constituting “vacant” property status. These scenarios that you should be aware of are:
Certain situations or procedures might require that you are away from your home for a very long time. These scenarios often occur unexpectedly and it’s a good idea to entrust a friend or family member with contacting the insurance company on your behalf if something like this should occur. Just remember to ensure that this person has power of attorney.
Extensive renovations may require you to vacate your home for a certain period of time. If it seems like this could cross the threshold of 60 days, contact your insurance broker.
Whether for work or for pleasure, you might someday have to travel for a long period of time. Ensure that you contact your insurance broker as to not face a possible insurance disaster on your return.
You might be selling your home and for whatever reason it might be left unoccupied for some time. Ensure that this time doesn’t extend for more than 60 days before contacting your insurance broker.
If you fear that you might be pushing the limits with one of your unoccupied properties or want to find out which alternatives are available to you, please contact us here.