To spouse or not to spouse? Whatever your decision, consider these cohabitation tips

In a landmark decision for cohabiting couples, the Constitutional Court recently ruled that partners in long-term relationships can inherit and claim maintenance from their deceased partner’s estate – without a will. For the rising number of cohabiting couples, this is welcome news. Prior to the decision, according to a 2016 report, over 3 million South Africans who cohabited outside marriage would have been unable to claim either maintenance or inherit anything from their partner’s estate unless it was stipulated in a will.

The economic downturn and the psychological pressures of Covid-19 have led many couples to consider moving in together. While the prospect of spending more time with a significant other may sound appealing, it is important to understand the pros and cons of what you may be getting yourself into before you cut keys, especially when it comes to short-term insurance.

Personal lines underwriting managers at Santam, Marius Steyn and Marius Neethling, caution that there are a few considerations that couples in long-term relationships need to think about when cohabiting.

Steyn says, “In the scenario where you move in with your partner, an insurer usually considers you the equivalent of a common-law or term spouse, depending on the seriousness of your relationship. That means you can take out a policy together. There are lots of boxes to tick – like making sure the household contents are covered.”

In terms of certain legislation, the term ‘spouse’ has been broadened to include cohabiting couples and this can lead to confusion regarding the financial and legal rights of those living together.

These are some of the ducks that Steyn and Neethling believe you need to have in a row, from an insurance perspective, when you move in together: 

Be fully covered

While the new Constitutional Court ruling may have you covered should your partner pass away, living with your partner presents slightly different challenges. For example, moving in together often results in a staggering amount of ‘stuff’, which means you and your partner or housemate will need to update the amount your household contents are insured for. If your relationship is seen as serious (insurers look for things like how long you’ve been together, if you’ve co-purchased furniture, etc.), then an insurer will treat you the same as they would a married couple. This means you can take out a policy between you, with one person being the main policyholder and the other, the additional insured.

Remember:

  • The main policyholder will be paid out in the event of a claim. It’ll then be up to him/her to pay the additional insured. Insurers don’t get involved in these politics and are in no way responsible if the policyholder does not pay his/her partner or housemate. So, trust is important.
  • If you both have separate household contents policies with different insurers and are wondering which insurer to go with, don’t just pick the lowest premium price: consider the benefits and excesses – what you pay and what you receive in return.
  • Get your household contents evaluated (or do this yourselves using an online calculator) so you’re certain you’re adequately covered for the current replacement value of similar new property of all your combined items.
  • When your household contents are on the move between properties you should notify your insurer of the new address prior to the day you move.  
  • It’s in your interest to tell your insurer about all the security features of your new home. Generally, there will be specific security requirements to qualify for burglary and theft cover.

(Temporary) trouble in paradise

It’s not common, but, if you happen to argue and temporarily move out, taking some of your household contents with you, these items may still be covered in your temporary abode, providing this is a private building – not a tent or caravan, for example. This only applies to a temporary situation though – if it’s a permanent split, then you’ll need your own new policy. 

Vehicle insurance is also important

Remember to add your partner as a regular driver on your policy if he or she uses your vehicle more frequently than you do.

If it really doesn’t work out

If the relationship comes to an end, then you should get your own policy as soon as possible, especially if you have one policy between you and you’re not the main policyholder. Remember, if you’re the additional insured, it’s up to the policyholder to pay you in the event of a claim, which could get difficult if you’re not together anymore.