TV and other media have extensively covered natural disasters recently – fires in Knysna, storms and floods in Gauteng and KZN and then more fires along Table Mountain. There is now no doubt that these events are occurring more frequently and, apart from loss of life, are causing extensive damage to property.
As worldwide climate change accelerates and impacts on us (wherever we live in South Africa), so will the dangers of us not insuring against these risks multiply.
A checklist for your home insurance
Make sure you have insurance! It is easy to overlook because if you do not have a bond, there is no actual obligation on you to be insured.
- Firstly, satisfy yourself that your cover is adequate and is for replacement cost. As costs are rising, check this at least annually. Be careful also not to under-insure as your insurer may then reduce your pay-out proportionately.
- Make sure swimming pools, Wendy houses and all outbuildings are included in the cover.
- To cater for the risk of your house being totally destroyed, by fire for example, insure for the cost of alternative accommodation for an extended period. This time period should be prudently calculated – if the entire neighbourhood is affected, this may increase the time needed to rebuild your house. You will also in this case have to compete for scarce resources to rehabilitate several homesteads.
- The costs of clearing your premises of rubble may be many thousands of Rand, and this cost must be specified in your policy.
- Check that all events are covered – some insurance companies, for example, do not cover homes subsiding. Other insurance companies may even withdraw certain cover when they have faced massive liabilities after a catastrophic event.
- Include SASRIA (riots, civil unrest) cover, particularly considering the increasing number of service delivery protests we are experiencing.
Finally, with climate change events almost certain to remain or worsen, expect to see insurance premium rises.
P.S. Don’t forget your business and other assets!
Your other assets – think vehicles and business premises in particular – are also going to be in the firing line. Check they are covered for fire, flood, storm etc damage.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)