Hail Storms Batter Gauteng Suburbs while Consumers and Insurers Count the Cost of Damage

Aon South Africa, insurance brokers and risk management consultants say that insurers and consumers have barely recovered from last year’s damage, when well over 25 000 claims were filed across each incident and the cost of the damage was in excess of R1billion. While it’s still too early to quantify the extent of the damage this morning, expectations are that these will once again be significant and that claims handling will be kicked into high gear to deal with the influx.

 

"At around 6pm on Monday 11 November, the storm unleashed walnut-sized and larger hailstones for almost 20 minutes, with suburbs on the East Rand bearing the brunt of the storm. Roofs of buildings were damaged, vehicles and windscreens were smashed, solar panels were destroyed, gardens were wrecked and homes and buildings were left battered once again. Traffic in many areas was at a total stand-still as visibility was zero,” says Mandy Barrett of Aon South Africa.

 

"We expect the insurance industry to be inundated with claims again and repairs are likely to take weeks, if not months to complete if last year’s situation is anything to go by. It’s an unfortunate situation as so many people have only recently recovered from the last bout of damage, only to have it happen all over again. Hail damage is becoming a far more regular occurrence and consumers need to make sure that their insurance policies do actually cover them for hail damage as the freakish weather patterns seem set to stay,” she adds.

Insurer loss ratios have already been hard hit and the market saw premium increases of up to 15% across the industry in the second half of this year already. This is not good news for consumers and expectations are that underwriters will be reviewing covers across the board next year and rates continue to harden.

 

"Over the last few years South Africa has suffered the effects of extreme weather on a more regular basis. Many consumers still believe that we are more insulated from extreme weather conditions such as hail storms, floods and strong winds, so they tend to cut their cover on the flawed premise that extreme weather events are too unlikely to happen. Clearly the weather patterns over the last three years are proving otherwise and I believe that climate change will continue to play havoc in this regard. It’s essential that consumers talk to their brokers to ensure that they are adequately covered, or they could find themselves seriously financially compromised,” explains Mandy.

 

"One of the most important learning’s that consumers can take out of the recent weather catastrophies is to assess whether they are properly covered for worst case scenarios. We are far from immune to such perils as the recent spate of storms and floods have reminded us and it’s important to know that adequate and correctly scoped insurance cover is available. Never make the assumption that your insurance policy covers you for all perils, including hail damage – it could very well be that your policy operates on a "named peril” basis and unless you have specified these, you won’t be covered.

 

"In this regard, a professional broker plays an invaluable role in guiding you through a proper needs analysis, helping you mitigate your risk, and in turn managing your premium costs. The bottom line is to get professional advice so that you can afford to plan for every eventuality and cover yourself appropriately without under or over-insuring in the process,” concludes Mandy.

 

Aon offers the following advice for policyholders filing claims for the latest hail storm damage:

• Assess the damage as soon as possible and make a comprehensive list of all items and damage.

• Take photos of the damage if you can – this will be very helpful to the insurance assessor as well when they come to inspect the damage for repair purposes.

• Notify your broker or insurer of the claim as soon as possible - you must notify insurers within a specified time frame of any incident which could give rise to a claim, the timeframe is usually around 60 days but it is wise to check your policy wording as some insurers differ on this.

 

• Remember that some insurers work with pre-approved repair companies – check with your broker before you embark on any emergency repairs or you could find yourself having to pay a larger excess or your settlement being less than expected.

• Based on last year’s experiences and the expected high claims volumes again this year, you could experience delays in repair due to the strain on available capacity of service providers and a shortage of materials such as building glass and windscreens. Some insurers have for example already distributed communications to clients advising that they will not extend cover such as car hire where the repair is authorised but the repairer is unable to complete motor vehicle repairs within the required period. From a timing point of view, many panel beaters will be closing for the festive season. It is advisable as far as possible to wait until the new year to take your vehicle for repairs if the repairer cannot confirm that this will be completed before the year end close. Remember though that your claim must be lodged in the meantime within the required notification period.

• It’s important to have your portfolio analysed professionally at least once a year and here a broker plays an invaluable role in assisting you in drawing up an inventory which you should review on a regular basis.

• Talk to your broker to make sure you are properly insured for all eventualities going forward and that you have the right amount of cover in place and that all perils are specified where necessary. Under insurance is possibly the biggest reason for partial pay out of claims, if not outright rejection. The key here is to insure for the replacement value of an item. Insurance industry figures show that about 40% of insurance policyholders are under-insured.