The one thing about natural disasters is that they are unpredictable and sudden. We all know that KZN was recently hit with torrential rainfall and the resultant devastating floods killed over 400 people, left thousands homeless, and caused unprecedented damage to businesses and infrastructure.
We have no superpowers and thus could never predict the next disaster, but what we CAN do is at least prepare for the worst, even if we are hoping for the best.
Here are a few things that you should know about your insurance and what you could do to mitigate financial losses.
Insurance companies have various policies and products that cater for all instances in which you may need cover. For example: home contents cover, car insurance, business interruption, loss of stock, employees’ wages and structural damage. These covers are vital to consider if you live in an area that is at high risk of repetitive flooding and/or other possible causes of loss or damage to property.
Although not all floods are as devastating as the recent flooding of KZN was seen to be, it is crucial that you are prepared.
Ayanda Mazwi, South Africa’s Short Term Insurance Ombudsman, has blamed the increased frequency of disasters such as flooding on global warming. Furthermore, she says: “In my experience and from what I have seen, the majority of South Africans are – unfortunately – uninsured, particularly with regards household contents”.
According Ms Mazwi, this is due to people simply not grasping the importance of having such insurance in place. Often it is seen as an unaffordable luxury, though without it, the cost of recovery is normally unattainable.
Am I covered for flooding?
As a rule, most standard insurance policies cover storm, flood, water, wind, hail or snow damage. Yet insurance companies are very strict in their assessment as to whether the resultant damage hasn’t been further increased due to negligence by the policy holder.
For example: Let’s say that severe weather has hit your area and, as a result, your roof has completely collapsed. However, it is discovered that your guttering has not been maintained and was thus was unable to provide thorough drainage. Furthermore, ‘wear and tear’ holes and cracks in the roof itself have not been repaired. This is considered to be neglect and insurance policies usually state “You must take all reasonable steps to prevent loss or damage, death, bodily injury, liability and accidents and reduce the damage to your insured property after an event, or we might not compensate you for any loss or damage.”
How can the homeowner take reasonable precautions to protect from or at least lessen water damage?
Are my household contents insured?
Now that you know what you could do to prevent damage yourself, you may be wondering if ALL your household contents are insured in case of flooding loss or damage.
Most policies that cover your contents will only cover the everyday items in your home. These include your furniture, your tv, kitchenware, kitchen appliances and so on. Please always remember to specify jewellery and other more expensive items you possess as these are often not covered by standard contents insurance.
Equally, cover such as loss of stock, business interruption, and employees’ wages are additional and not standard. It would be too late to rectify your policy after the loss or damage in a flood.
What do I do now?
No insurance company is exactly the same. You always need to contact your broker or your insurer and ask what your specific policy says regarding what you are covered for. For example, your policy may differ to that of your friend who lives next to a beach. It is vital to regularly reassess and update your policy by having your broker assess all your needs.
Insurance is an individualised product, and if you are at risk for flooding in your area, contact your insurer or broker to get confirmation that you are covered for this. Remember, always ask what is excluded.
Never assume you are covered, always check, check and check again!