The violent storms that have swept South Africa over the past weeks have left many people with one question on their minds: “I wonder if my insurance will cover the damage?”
With streets and buildings flooded, the damage to cars, homes and businesses in Gauteng and KwaZulu-Natal is anticipated to spiral into millions of rands. South Africans will be turning to their insurers with claims, hoping that they will be met.
According to Vera Nagtegaal, the executive head of Hippo.co.za, this outcome shouldn’t be left to guesswork.
“South Africans should examine and understand their insurance policies, and ensure that they are covered for all possible eventualities,” she says. “Being underinsured opens people up to risks – and so when events take place such as extreme weather, more bad news might be on the way.”
Why an insurer might reject your claim
There are certain factors that an insurer will consider when you submit a storm damages claim. Nagtegaal says that these include whether the damage to the property or vehicle directly relates to the bad weather, and what the condition of the property or vehicle was in the first place.
A property claim might be rejected if the property didn’t have adequate drainage, retaining walls were not thick enough or foundations were poor quality.
“For these reasons you should always have any property renovations done with the help of an architect in consultation with an engineer to make sure that the building work is structurally sound. Most insurers will also work with assessors to help determine any risks before cover is put in place,” says Nagtegaal.
A vehicle claim might be rejected if the policy doesn’t cover flood damage, or if water damage to the engine was caused by negligent driving.
“Storms like these are a good reminder to us all to check whether our insurance policies are up to date and that they cover us for all eventualities,” says Nagtegaal. “And, if you are buying a new policy, don’t always go for the cheapest option – make sure that the saving isn’t coming at the expense of a much-needed benefit.”
Make a date to check your policy
Nagtegaal says policyholders should read through their policy at least once a year to make sure that it is aligned with the current value and status of the insured assets. “You may not remember that you have made a change to your home that your insurer should know about, and reading your policy could jog your memory. In some cases a change, like installing a security system, could actually result in a reduced premium.”
You can do this policy update with your insurer or broker over the phone as they might help you by asking the relevant questions.
Finally, Nagtegaal says that it is vital that your insurance covers the true value of your property and car. “If you are underinsured – which means that you are insured for a value that is lower than the total value of your possessions – then your insurance may only pay out a representative portion of the costs of the damage.”
For example, if you stated that your household contents were worth R100 000, but on inspection the assessor found that they had been worth R200 000, you could only receive 50% of the damages claim, irrespective of what the total claim was.
“Don’t under estimate costs to save on premiums. You could be at risk of a reduced pay out when you need it most,” she says. “If you are uncertain about any of this, speak to your insurer right away to get clarity on your cover, and make adjustments where necessary.”