Page 31 - Hollard Private Portfolio - Version 3.4

Buildings
Standard construction
Non-standard construction
Paying guest
Tenant
Subsidence, landslip or ground heave
Means that all buildings have been built with:
○ walls of brick, stone or concrete.
○ roofs of slate, tile, concrete, asbestos or metal.
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.
A guest who stays in the building for a short period, without a contract, in exchange for a fee.
A person who signed a rental agreement to live in the building for a set period. This includes sub-tenants.
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. 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.
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
If your claim is for an old shower door which accidentally broke, we will replace it with a new door, even if the old door is worth a lot less.
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 – or R25 000.
The pay-out is calculated as follows:
Replacement value Sum insured Storm damage
Under-insurance calculation:
R200 000 R50 000
R400 000 X 1 =
R400 000 R200 000 R50 000
R25 000 (less any excess applicable)
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