Impact of extreme weather on car and home insurance

Christelle Fourie, Managing director of MUA Insurance Acceptances, says that certain areas, such Western Cape and Northern and Eastern parts of South Africa, are becoming more susceptible to flooding. "This may eventually result in flood insurance in these areas becoming uninsurable because insurance companies cannot afford the loss due to the increase in frequency and size of losses.

"This is a huge problem, especially for those who have bought a house on a river or ocean front, where the key risk factor of flooding has become uninsurable. This makes the resale of the property difficult because in order to obtain a bond, comprehensive insurance cover has to be in place."

Fourie advises those consumers looking to buy a new home to check whether the home is situated in a high risk area for flooding to avoid a situation where they struggle to find insurance cover. "While most homeowners and householders insurance policies do automatically cover flood damage as it is a sudden and unforeseen event, if the house is located in a high risk area the homeowner could face higher premiums or excesses, limitations in cover or no cover at all. That is why it is important for consumers to read and understand their policy or speak to a broker to ensure they are aware of all possible insurance and risk implications."

Fourie also has advice for homeowners affected by floods. "Following a flood, it is important for homeowners to take action as soon as possible by trying to dry out and clean up the home to minimise the damage. A flood normally affects a very large area, meaning all insurance companies and their available resources, such as loss adjusters, builders and plumbers are impacted and stretched for time. This means that service to the area will be delayed due to an overflow of work so homeowners should act as they are their own insurer and try to mitigate the damage. However, this must never be done at the jeopardy of one's own safety."

Those living in the Gauteng area are all too familiar with the recent increase in number and size of potholes on the road, largely due to a lack of road maintenance and prolonged flooding, says Fourie. "However, many consumers remain uncertain about whether or not their insurance policy covers them for damage caused by potholes."

She says if a motor vehicle is insured on a comprehensive basis, then any damage arising from potholes would normally be covered. However, there are some exceptions that motorists should be aware of. "Some insurance contracts have an exclusion which stipulates that damage to tyres, and in some instances damage to rims of car wheels, is not covered if the damage arises from road hazards and potholes, except where the damage is as the result of an accident which also causes damage to other parts of the insured vehicle.

This means that if the only damage caused by a pothole is to the tyres of the vehicle, then the insured would often have to fund this cost themselves."

She says damage caused by potholes can vary considerably depending on the severity of the accident and the type of vehicle involved, as well as the type of rims and tyres fitted on the car. "In a recent case where an Aston Martin hit a large pothole while travelling at a high speed, the entire undercarriage of the car was destroyed resulting in the car being written off."

Even if the policy does cover pothole damage, it is also important to remember that regardless of fault, the consumer would still be eligible to pay the basic excess, which in some instances could run into a couple of thousand Rand or more, as well as the adjustment on their claim free group which would result in an increase in insurance premiums," says Fourie.

It is advisable for motor vehicle owners to speak to a broker as there are specialist insurance products on the market that insure tyres for loss or damage without any onerous terms and conditions, says Fourie.

Bearing the above insurance considerations in mind, consumers can better avoid the negative impact of floods on their short term insurance, concludes Fourie.

- Always read and understand the terms and conditions related to flood

and pothole damage in your home and motor insurance policy

- Before buying a home, always check whether the home falls into a

high flood risk area

- Drive slowly and carefully to avoid damage causes by potholes

following or during heavy rainfall or floods

- If a vehicle is still under manufacturer warranty, then it is

essential to always clear this with the manufacturer first, as repairs may sometimes invalidate the terms of the warranty

- When in doubt, consult the services of broker who will be able to

explain and negotiate cover for flood or pothole damage

- Motorists can lodge a claim against the relevant road management authority to recover the costs of the damage to their vehicle caused by a pothole. The best way to do this is to contact the specific municipality authority or Department of Public Works in the location of the pothole or the South African National Roads Agency (SANRAL) should the pothole occur on a national road.