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When natural disaster strikes, insurance plays a crucial role

When natural disaster strikes, insurance plays a crucial role
28-06-24 / Chris Smit

When natural disaster strikes, insurance plays a crucial role

Johannesburg - The recent storms in KwaZulu-Natal (KZN) and Eastern Cape, along with other extreme weather events that have occurred across the country over the past year, have brought profound loss to consumers with some facing the mammoth task of rebuilding properties placing them under further financial strain.

Consumers are usually further impacted by the aftermath of a natural disaster when properties are to be restored or replaced. The financial impact is even greater when consumers are uninsured. Data collated from the South African Insurance Association (SAIA) members shows that homeowners' cover claims in KZN increased considerably, from 11% of the national claims in 2019 to 22% in 2022, with the total homeowners' cover claims paid in KZN increasing from over R300 million in 2021 to over R700 million in 2022; with the increase largely attributed to the weather-related events.

According to the latest FinMark Trust’s Finscope Survey, only less than 10% of households in South Africa have homeowners' or household contents insurance. This indicates that there are still more households that do not have insurance covers for their properties. Therefore, SAIA would like to encourage homeowners to recognise the value of having their properties insured for protection from financial loss should they encounter damage to or loss of their property due to an unforeseen event.

It is also essential that consumers are aware of and understand the related risks that their properties may be exposed to and as such, establish possible risk mitigating approaches to reduce their risk exposure. This includes evaluating the conditions and location of their property, in order to establish the potential damage/ loss exposure to natural disasters.

Non-life insurance acts as a vital safety net in times of crisis. Consumers should proactively understand their coverage and taking appropriate measures to mitigate the impact of natural disasters and rebuild with confidence.

Actions for consumers to consider when affected by natural disaster:

  1. Observe communication from the local or disaster management authorities on recommended evacuation and safety tips.
  2. Capture photos or videos of the damage to your property to serve as crucial evidence during the claims process.
  3. Have your insurance contract handy and always familiarise yourself with its content, including the extent of cover for your property and household content.
  4. Notify your insurance company or insurance broker promptly of your claim.
  5. If your home is uninhabitable, inquire about coverage for alternative accommodation, as many policies include this provision.

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