Homeowners Insurance - Doe's it Cover a Landslide

Homeowners insurance protects your home, the actual brick and mortar structure, while householders insurance protects the movable items inside your house such as furniture, clothes and personal belongings.

When you are a homeowner and have obtained finance to pay for the purchase of your house, the financial institution who provided you with the homeloan will insist that you take out comprehensive homeowners insurance. The banks needs to know that you will be in a position to repay the loan in full should your house burn to the ground tonight.

Once your homeloan is paid off the responsibility to see that you have sufficient homeowners insurance rests entirely upon your own shoulders. Owning your own home is the biggest financial investment you will make in your lifetime and you need to protect that investment by ensuring that you are fully insured.

Hint: You cannot insure your home for damage resulting from wear and tear, you are responsible for the maintenance of your home.

When you insure your home there are different perils covered in the policy. You must take the responsibility to ensure that you are covered for every possible scenario that could affect you. So what is covered in a standard homeowner’s policy?

  1. Fire
  2. Lightning
  3. Explosion
  4. Earthquake
  5. Other natural disasters – storm, water, wind
  6. Burst geysers or water pipes
  7. Impact by vehicles, falling trees (not while they are being felled)
  8. Subsidence – structural damage caused by natural shifts of land or through human intervention

Let’s stop right here as this is where you must take note: Some homeowner policies will state that you have subsidence cover but then also list a whole range of subsidence related issues for which they take no responsibility, such as:

  1. If the subsidence resulted from changes in volume of clays based soil or rock as a result of changes in moisture levels.
  2. Normal settlement, shrinkage or expansion of the supporting soil.
  3. Excavations, other than mining activities.
  4. Removal of pillars.
  5. Additions or alterations to your house.
  6. Defective designs, materials or workmanship.
  7. Ground used to fill areas under paving and floor was not properly compacted.
  8. Retaining walls not designed according to engineering specifications.
  9. Additional underpinning of foundations to prevent further damage.

As a layman, after reading the exclusions above, I have no clue as to what is actually covered under subsidence. Some policies do not include any subsidence cover whatsoever.

With subsidence we also get landslides. It is frightening to think that you may be under the false impression that your precious holiday home, build against a sand dune, is insured against these perils while it is not. Therefore, make 100% sure that you ask for subsidence and landslide cover to be added to your policy, especially if you live in an area where this problem may the prevalent. You will pay extra for this cover but this is a risk not worth taking without cover.

Subsidence and landslip in insurance terms are classified as follows:

Ground sinking under your foundations or earth tumbling by gravity, for example near the edge of a dune.

Insurance policies differ from company to company, be aware of this is you change your insurer. You may have been covered for resultant damage at your previous company but not by your new insurer.

Hint: Reading and understanding the exclusions on any insurance policy document is even more important than reading the inclusions.

Even where you chose additional cover for subsidence and landslide you will still find exclusions. Read them carefully and ask your insurance broker or insurance company for an explanation.

Changing weather patterns in South Africa, as in the rest of the world, have made it necessary for all of us to review our insurance cover. Natural disasters, as we often see on television in other parts of the world, are happening more frequently in South Africa nowadays. If your house is build against a river bank, on top or at the bottom of a hill, in a sinkhole area or near a river additional cover against subsidence and landslide should not even be an option but a necessity.

Is your house built to last?