Be alarmed about ‘occupied’ clause when claiming

Your teenaged son or domestic worker may be on the property, but you probably still have to alarm your house.

If your teenaged son lives in an outbuilding on your property, do you have to lock and alarm your home, even when he’s there?

Unless you’ve made special arrangements with your insurer, yes, you probably do.

The same goes if you have a live-in domestic worker, your mom in a granny flat, or a tenant in a cottage on the property.

All insurers have an “alarm warranty endorsement” clause in their policies stating that they will not be liable for loss by theft while the residence is unoccupied, not unless it was alarmed, with armed response.

And just because someone is on the property, it doesn’t mean that you can leave the house unalarmed, the logic being that if someone was to break into the main house, a person living somewhere on the property may not be aware of that, and the loss would be greater than it would be if someone was actually in the dwelling itself.

Of course, that could be said of my teenaged son sitting in his bedroom, inside the main house, with the door closed, playing a computer game with his headphones on, but in terms of my policy wording, any loss arising from a housebreaking with him in the house would be covered by my insurer.

The bottom line is – if the contents of your home are insured, you need to be very sure of how that “occupied” clause applies to your domestic set-up or you’re at risk of discovering, after a break-in, that your insurer is not interested in settling your claim.

Just because there is someone on your property when you nip out to the shops on a Saturday afternoon, doesn’t mean it’s okay not to put on your alarm – your insurer would probably regard the property to have been “unoccupied” in the event of a burglary.

Short-term insurance ombudsman Deanne Wood said it was crucial that consumers check their policies in this regard.

Most policies have standard clauses regarding when a property is considered occupied and when it is not, when in reality people live in many different ways these days.

The time to negotiate with an insurer about the terms of your cover is when you are taking out the policy, Wood said, not at claims stage.

“Ideally an assessor should come round to the property, find out what your particular living arrangements are, and then negotiate what is expected of you in terms of alarming the house,” she said.

“All too often consumers believe that the policy they are given by the insurer is the policy they have to accept – they don’t negotiate the terms at all; they just agree to what they are presented with,” Wood said.

“They don’t realise that they have the power to negotiate; and they should do so, because otherwise they may have alarm provisions imposed on them which don’t fit their circumstances.”

So if you don’t want to have to alarm the house every time you nip out to the shops or go out for dinner because your adult son or daughter is in an adjoining cottage or a flat built on top of the garage, tell your insurer that, and be prepared to pay the higher premium, or a higher excess.

If you don’t, and your house is broken into while you’re pushing your trolley around a supermarket, your insurer will in all likelihood consider the property to have been unoccupied, therefore you should have alarmed it, and that adds up to no pay-out.

Wood’s office recently handled a complaint arising from a house theft claim which was rejected by an insurer on the grounds that the house was not alarmed at the time, despite being “unoccupied”.

“The house was one of three that opened onto a communal garden and a river front, with palisade fencing separating each house from garden.

“The family in question was entertaining in the garden, so their gate was open, and they and their guests were periodically moving between the garden and the house.”

Nevertheless, thieves managed to break in and steal several items, but the claim was rejected on the grounds that the house was unoccupied and therefore should have been alarmed.

“We sided with the consumer in that case, because the alarm warranty endorsement was clearly not meant to be applied to a situation like that,” Wood said.

Assume nothing – fully disclose your living arrangements with your insurer and ensure that you both know when your home is considered to be unoccupied and when it is not.

The worst way to find out that you made a wrong assumption about the need to set your alarm is when you make a claim.

● The office of the ombudsman for short-term insurance offers policy-holders free, impartial mediation should they feel that their claim was unfairly handled by their insurance company.

To find out how to go about lodging a complaint, go to www.osti.co.za

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