Page 31 - Hollard Private Portfolio - Version 3.5

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Hollard Private Portfolio – Version 3.5 – 7 May 2024
Buildings
Non-standard construction Means that a building has been built with material other than those defined in the above
definition of 'Standard Construction', such as a thatch roof or walls of wood.
Paying guest A guest who stays in the building for a short period, without a contract, in exchange for
a fee.
Tenant A person who signed a rental agreement to live in the building for a set period. This
includes sub-tenants.
Subsidence, landslip or
ground heave
Refers to the movement of the land that supports the building.
Subsidence means sinking, i.e. the vertical, downward movement of the soil.
Landslip means the sliding down of a mass of land. It is in effect a small landslide and it
typically occurs on a slope.
Ground heave means the upward movement of soil supporting the building.
Active soil means soil that changes in volume in response to changes in moisture content.
i.e. an increase in volume (heave or swell) upon wetting and decrease in volume (shrink)
upon drying out, such as clay.
Paying out after a claim
How much we pay
We pay out based on the reasonable repair cost of the part of your building that is damaged. If the damage to the
building is uneconomical to repair the pay-out will be based on the replacement cost of the damaged part of the building.
Example
If your claim is for an old shower door that accidentally broke, we will replace it with a new door, even if the old door
is worth a lot less.
What if you are under-insured?
If you have insured your buildings for less than its actual value – i.e. you are under-insured – then you will have to bear
a proportion of any loss in the event of a claim. In calculating this, we will use the principle of average.
Example
Your buildings are insured with us for R200 000, but the cost to replace it is R400 000.
This means you are under-insured by half (or 50%). Put another way, you are only ever insured for half of any claim
you make. So if your building is damaged in a storm and it costs R50 000 to repair, we can pay out only half of R50 000,
in other words R25 000.
The pay-out is calculated as follows:
Replacement value R400 000
Sum insured R200 000
Storm damage R50 000
Under-insurance calculation:
R200 000 R50 000
R400 000 X 1 = R25 000 (less any excess applicable)