Languishing under one of the worst droughts in 30 years, Capetonians woke up this morning to what can at best be described as freakish weather conditions that are battering buildings, cars and coastlines.  The region could very well be  declared a NatCat zone by insurers after severe winds, heavy rainfalls and flash flooding caused extensive damage to properties and vehicles in the Mother City and surrounds, and tragically, has already claimed eight lives.  Safety and security services are already in high gear and it is of utmost importance that people heed the safety warnings and stay indoors and off the roads.   

“While it’s still too early to quantify the extent of the damage, we expect huge property and motor losses. Severe weather conditions from golf ball-sized hail, electric storms to heavy rainfalls, flash flooding and tornados are a far more regular occurrence in South Africa than we realise, and will continue to increase in frequency and voracity due to climate change.  Besides the material damage, flash floods, broken power lines and falling trees and debris present very real risks to lives, so ensuring safety by staying indoors and on high ground is essential,” says Mandy Barrett, Manager of Personal Lines Marketing & Sales at Aon South Africa.

According to Aon South Africa, risk advisors and insurance brokerage, in the last four years, weather-related damage has cost the insurance industry more than R3billion in losses. 

Not All Insurance is Created Equal – Get Professional Advice

Many consumers still believe that South Africa is more insulated from extreme weather conditions such as hail storms, floods, fire and strong winds, so they tend to cut their cover on the flawed premise that extreme weather events are not as likely to happen.

“If we look at the five years especially, climate change looks set to continue to play havoc. One of the most important learnings that consumers can take out of the recent weather catastrophes is to assess whether they are properly covered for worst case scenarios before it is too late. In this regard, a professional broker plays an invaluable role in guiding you through a proper needs analysis, interpreting the policy terms and conditions, helping you mitigate your risk, and in turn managing your premium costs. 

“It is imperative to ensure that your policy is geared to address what the insurance industry terms “acts of god”. In most insurance policies you will find that you are covered for basic perils which include hail, severe rain storms, wind storms such as tornados and snow.  It is, however, always a good idea to confirm as some policies may exclude certain perils unless specified. Many entry level insurance policies usually cover only the absolute basics and any additional cover like hail needs to be purchased at an additional premium.  If you don’t know this and don’t engage with a professional advisor to guide you, you could assume that you’re covered for a peril when in fact you are not.  You’re likely to find this out the hard way – at claims time - when it is too late,” warns Mandy.

Insuring your most important assets – likely to be your vehicles, home and everything in it - and your ability to recover from a major catastrophe, should be approached in the same way as managing your finances or investing in the stock market – don’t do it without professional advice.  Mandy points to the importance of risk advice when it comes to catastrophic losses like losing your home completely or it becoming uninhabitable due to a fire or flood.  

Your insurance shouldn’t only cover you for the repairs to your property, but also provide for alternative accommodation that covers the cost of staying somewhere else, like a hotel or rented house, while your house is being repaired.  Even the accommodation for live-in domestic workers will be taken care of with a comprehensive policy like By Preference, exclusive to Aon clients. No-one really considers the aftermath of a disaster and what that means for you financially and emotionally.  Where will you stay, where will you get clothing and basic amenities? However this is exactly what a broker or risk advisor is trained to do.  This type of support and advice in structuring your insurance cover proves lifesaving in what could otherwise be a lose-all situation,” explains Mandy.

Filing your claim for a NatCat

Aon offers the following advice for policyholders filing claims: 

• Notify your broker or insurer of the claim as soon as possible. Assess the damage and make a comprehensive list of all items and damage. With the expected extent of building damage and high volume of claims expected, the race is on to get damages sorted. 
• If your house was flooded, try and clear out as much water as possible to prevent further or permanent damage. Take photos – this will be very helpful to the insurance assessor for repair purposes. 
• Insurers work with pre-approved repair companies – check with your broker before you embark on any emergency repairs with non-approved contractors or you may pay a higher excess.
• Talk to your broker to make sure you are properly insured for all eventualities going forward. Experience has shown that the Western Cape is subject to many weather related risks – from fires, floods and drought, so make sure you are properly insured for a worst case scenario - under insurance is possibly the biggest reason for partial pay out of claims, if not outright rejection. 

According to Aon, weather-related claims are  prime case studies that demonstrate that consumers need to make sure that their insurance policies cover them comprehensively, not only for the damages, but for any alternative arrangements that need to be made while the damage is being repaired.

About Aon
Aon plc (NYSE:AON) is a leading global professional services firm providing a broad range of risk, retirement and health solutions. Our 50,000 colleagues in 120 countries empower results for clients by using proprietary data and analytics to deliver insights that reduce volatility and improve performance.

About Aon South Africa
Aon South Africa is a leading provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services.  Aon Empowers Results through over 700 colleagues in 13 offices in South Africa with its head office in Sandton, Johannesburg.