Consumers and Insurers Count the Cost of Gauteng Hail Storms

Little more than two weeks after a devastating hail storm hit Johannesburg’s suburbs with golf ball-sized hail stones, a second freak storm has caused severe damage in suburbs in Gauteng on Thursday, 8 Nov.

According to reports, the first storm on 22 October saw as many as 25,000 claims being filed across all insurers, with pay outs expected to reach ZAR1 billion (USD114 million). Thirteen people were killed.

“On Thursday 8 November, consumers and insurers were once again left counting the costs and damage after a second severe hail storm hit the East and West Rands. Suburbs were left without electricity, roofs were damaged and in some instances pulled right off, vehicles and windscreens were smashed, gardens were destroyed and homes and buildings were left battered,” says Mandy Barrett of Aon South Africa.

While insurers are still reeling from the backlog of claims that need to be processed from the first storm, windscreen suppliers, panel beaters, plumbers and home maintenance crews are frantically trying to cope with the demand for repairs. The double-hit will definitely be leaving many people frustrated and out of pocket. Insurer loss ratios have also been hard hit so consumers can expect that underwriters will be reviewing covers across the board and rates will most likely harden.

“Over the last two to three years South Africa has suffered the effects of extreme weather on a more regular basis. But in South Africa there is a misplaced view that extreme weather disasters happen a long way from home, that we are in a geologically safe zone and are not as vulnerable as other regions or countries. As a result, we are seeing highly conservative approaches adopted by many consumers who cut their cover on the flawed premise that certain low probability events are simply too unlikely to happen to them. The problem when such disasters do strike is that they find themselves woefully underinsured, and as a result will be seriously financially compromised,” explains Mandy.

“One of the most important learnings 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.

“A professional broker plays an invaluable role in managing and helping you mitigate your risk, and in turn managing your premium costs. By planning a bespoke insurance offering with your broker that is customised to your specific needs, you can afford to plan for every eventuality and cover yourself appropriately without under or over-insuring in the process,” concludes Mandy.