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Let your insurer know if your property is built below the flood lines, says Mutual & Federal

22 June 2010 Mutual & Federal

Non-compliance with legislation related to the construction of buildings below certain flood lines could result in financial ruin.

“Buildings close to rivers, dams or large water masses can be exposed to flooding risks,” says Wayne Richards, Group Manager Underwriting and Product Solutions for

Mutual & Federal, one of South Africa’s leading short-term insurers. The company encourages all short-term insurance policyholders and building contractors to comply with the National Building Regulations and municipal by-laws related to construction below the flood line.

“Policyholders looking to insure these homes or buildings must fully disclose material information related to the location of their property. Non-disclosure could result in disputes at claim time and depending on the specific circumstances, even flood-related claims not being fulfilled.”

Richards suggests that all policyholders with property located in close proximity to water conduct an evaluation to determine the risk of floods in the area. A number of companies and municipalities can provide property owners with information on whether their buildings have been built within a flood zone.

Certain municipal by-laws prohibit the construction of buildings below the 50-year flood line and the responsibility lies with the owner of the property to adhere to these laws.

“Mitigating this risk does not have to be a costly exercise,” says Richards. Information pertaining to danger areasisavailable to prospective policyholders from municipalities and such information can alsobe found on the internet.”

However, employing the services of a professional to gauge the risk exposure is always a safer option. If a professional surveyor found that the building fell within the danger zone, the property owner could be required to provide proof from the municipality that the building was correctly built within the parameters of the municipal by-laws.

Richards concludes, “It is imperative that policyholders comply with legislation and disclose any material fact that could adversely affect the risk. This includes declaring that a building falls inside the flood line.”

Mutual & Federal encourages all its policyholders in such areas to confirm the location of their properties to avoid the exorbitant financial implications of potential flood damage.

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