Homeowners Insurance | Prosumer Connect

More storms mean more insurance claims, but they’re not always paid out – here’s why

Shaun Marshall — Mon, 08 Jul 2024 12:31:38 +0000

Does the fact that your house has storm damage always guarantee that you claim for damages and losses will be paid out?

With more storms hitting South African communities there are more short-term insurance claims for damage to homes. While it puts your mind at rest to know you are insured, claiming for storm damage and having your claim accepted, is not always that easy.

This is especially clear if you consider the case studies from the latest report of the Ombudsman for Short-term Insurance (OSTI) for 2023. In 2023 the second highest number of complaints, around 25%, related to homeowners’ claims declined on the basis of policy exclusions.

The majority of these claims related to damage caused by acts of nature but were declined on the basis of gradual deterioration, lack of maintenance and wear and tear, followed by defects in design or construction.

Looking at why these claims were rejected or accepted can teach us how to ensure that our claims are accepted when it comes to our time to claim.

CLAIM REJECTED: Storm damage to boundary wall

The consumer complained after the insurer declined a claim for his collapsed boundary wall that he said collapsed due to extreme winds in April 2023. The insurer rejected his claim on the basis that the damage was caused by gradual deterioration.

The insurer relied on the following provisions of the policy that it covers loss or damage to buildings caused by storm or wind but does not cover loss or damage caused by wear and tear or gradual deterioration. Loss or damage caused by weeds or roots is also not covered.

The boundary wall was constructed as a double skin wall with a single skin wall built on top. It was three metres high and the insurer observed that the wall did not meet the minimum specifications as set out in the National Building Regulations.

The collapsed boundary wall was not designed to act as a retaining wall but served this purpose. The insurer contended that the wall lacked the necessary columns that were typically required for this type of wall and that its structural integrity had been compromised over time due to the invasive root systems from the surrounding plants.

The insurer said this weakened the wall which led to its eventual collapse. While strong winds may have contributed to the collapse of the wall, it was not the only cause.

After reviewing the evidence submitted by the insurer and the consumer, OSTI believed the proximate cause of the collapse of the wall could not be a single and sudden event. The evidence showed the office that the wind served as the “final straw that broke the camel’s back”.

Therefore, OSTI was of the view that the insurer could substantiate and justify the policy provisions it relied on and upheld the rejection of the claim.

CLAIM REJECTED: Storm damage to property

Another consumer complained that his insurer rejected the claim for storm damage to his property on the basis that the damage fell outside the scope of cover. The insurer said the damage was caused by a combination of extreme weather conditions (storm) and a lack of maintenance.

However, the insurer stated that the primary reason for the rejection of the claim was that the policy excluded cover for resultant damage and damage caused by a lack of maintenance.

The consumer said his area experienced a thunderstorm in December 2022 when about 50mm of rain fell within a short period. He said that water damage occurred to various interior parts of his property, including ceilings and cornices and that the damage was directly caused by the severe storm rather than a lack of maintenance.

The insurer appointed an assessor to determine the cause and extent of the damage. The assessor found visible and evident stormwater damage to several areas of the property in the bathroom, lounge, kitchen and garage.

The assessor also conducted a roof inspection. The roof consisted of cement tiles with a flat concrete section. The assessor noted that the roof required maintenance and that the waterproofing was insufficient. Various cracks were visible in the waterproofing and some areas were lifting up and peeling.

The assessor also found that several roof tiles had shifted over time leading to blockages in the gutter system. Importantly, the assessor concluded that there was no storm-related damage to the roof and he emphasised that a lack of maintenance was the proximate cause of the damage.

There was indeed a heavy storm that day

In addition, the assessor confirmed that there was indeed a heavy storm that day. The assessor indicated that the damage to the property was the result of a combination of severe weather conditions, specifically the storm and maintenance-related issues, particularly relating to the roof.

The assessor also noted that the lack of maintenance to the roof resulted in stormwater infiltrating the property’s interior due to the deteriorated waterproofing and overflowing gutters. Despite this finding, the assessor concluded that the claim warranted approval.

However, the insurer rejected the claim because the policy excludes damage caused by any process that uses or applies water, wear and tear, gradual deterioration, mould, rust or corrosion, contraction or expansion of soil as a result of its moisture or water content and damage resulting from or aggravated by the lack of maintenance of private residential structures.

Despite acknowledging that stormwater caused interior damage due to the deteriorating waterproofing and overflowing gutters, the insurer clarified that damage to the walls and ceiling resulting from a lack of roof maintenance would not be covered as the policy also excluded cover for resultant damage.

OSTI agreed with the insurer after reviewing all the evidence and upheld the insurer’s decision to reject the claim as it was made in line with the policy terms and conditions. Although it appeared as if concurrent causes operated to cause the loss, the insurer adequately demonstrated, relying on its assessor’s report, that the unmaintained roof was the proximate cause of the damage and that the policy did not cover resultant damage.

CLAIM PAID OUT: Claim for storm damage and emergency repairs to home

The consumer registered a claim for damage to his house that occurred during the April 2022 KwaZulu-Natal floods. The insurer partially accepted liability for the claim but declined the claim in respect of the reimbursement for emergency repairs that the insured had conducted at his own cost due to the delay by the insurer in assessing the claim.

The insured appointed two informal labourers to assist with cleaning and clearing the excessive mud and debris in the yard and appointed a professional plumber to unblock and repair water pipes that were blocked and damaged by sand and mud caused by the flood.

The insurer relied on the provision for using your own service provider to decline this portion of the claim, that states that the insurer has the right to require that a service provider of its choice do any work required on the insured property.

The consumer submitted that the insurer’s service provider arrived at his property to assess the damage and to conduct emergency repairs three weeks after the incident and that due to the damage, it was necessary to conduct emergency repairs to the yard as there was excessive mud that was blocking the main door of the house and hindered entry into and exit from the house.

Unblocking the water pipes was also necessary to make the house habitable. The consumer provided the documents and information as evidence to substantiate his claim, as well as photographs depicting the state that the yard was in.

High volume of claims in April 2022

The insurer confirmed that it registered a high volume of claims for the April 2022 floods and as a result, there was a shortage in the number of service providers to timeously attend to assessment of claims. Some areas were also not accessible due to the storm damage.

The insurer rejected the consumer’s report for the costs incurred for clearing the debris and stated that it was insufficient proof as he could not provide a proper invoice or proof of the alleged payments to the informal labourers.

The insurer submitted that the consumer did not provide sufficient evidence to prove that water pipes were blocked or damaged.

After reviewing the evidence submitted by the consumer and the insurer, OSTI agreed that the report by the consumer detailing the costs he incurred for clearing and cleaning the yard was insufficient. However, when the report was considered in conjunction with the photographs he provided, which depicted the state of the yard before and after the labourers cleaned it and showed them working and the report provided by the insurer’s loss adjuster, OSTI found that the consumer provided sufficient evidence to hold the insurer liable for the reimbursement of these costs.

OSTI also considered the invoice for the plumbing costs and the supporting photographs depicting a burst water pipe amongst the debris. The invoice stipulated that the plumber repaired and connected a burst water pipe, while the photographs depicted a burst water pipe with water running through it among the debris in the yard. OSTI found that the insured had also provided sufficient evidence in this regard.

Therefore, OSTI recommended that the consumer’s claim for reimbursement of the costs that he incurred be settled according to the rates of the insurer’s service providers. The insurer agreed to abide by the recommendation.

Source: The Citizen

Cancelling insurance could have long term implications Standard Bank says

Shaun Marshall — Mon, 18 Mar 2024 11:35:25 +0000

With fuel increases and the rise in the cost of living in almost every other area of life, many homeowners may be concerned about their finances. Photographer: Armand Hough / Independent Newspapers.

Households in South Africa seem to have no reprieve as they continue to face hard-hitting increases that impact their cost of living, including interest rates, electricity tariffs and rocketing food and fuel prices.

Earlier this month, South African motorists were hit hard at the petrol pumps once again by a significant fuel price increase of R1.21 cents per litre for both grades of fuel, 95 and 93 ULP and LRP.

With these increases and the rise in the cost of living in almost every other area of life, many homeowners may be concerned about their finances.

Given this impact, households may be looking for ways to cut down on expenditure to meet their monthly payment commitments.

One area you might be tempted to cut is home and car insurance but Dr Hardy Ncube from Standard Bank Insurance warns consumers to think twice before cancelling their insurance coverage as this may have far-reaching consequences and could lead to huge expenses in the long run.

Instead, he advises that people look at smarter, less risky ways to manage their expenses.According to Ncube, Standard Bank Insurance understands that South Africans are battling severe financial pressure.

“We are doing everything we can to assist our homeowner clients, including creating awareness around some of the options they have at their disposal, but may not yet be aware of, that could help make their insurance commitments more manageable,” he adds.

Making insurance more affordable

Dr Ncube says before making any drastic changes, one should consider reaching out to an insurance broker or their insurance company directly to see how they can assist to streamline their insurance costs.

“One way to do this is by combining various types of insurance under one policy. This simplifies your finance administration, and it could also save you money,” he says.

“Additionally, make sure your home contents policy accurately reflects your current possessions and their value. Many people pay for coverage they don’t need simply because they’ve not updated their policy.”

Ncube advises clients to reach out to their insurers to conduct a policy review, to understand exactly what their current policy covers.

“It may have been the case that the policyholder’s circumstances at the inception date of the policy have changed. It might be that you’ve downsized or sold off some valuable possessions or physical assets that were covered by your home contents insurance. If those items no longer need to be accounted for, you might find that your premiums become more affordable. It’s important to try and personalise your cover as much as possible so that it accurately reflects your existing circumstances.”

Dr Ncube adds that if a client’s policy is reaching its anniversary or renewal date, and they are worried about whether they will be able to afford the annual premium increase, they can contact their insurer or broker (at least two months prior to renewal) to conduct a review and to negotiate a premium that they can afford.

Finally, avoid duplicating coverage. Remember, the goal is not to reduce coverage to the point of being underinsured but to ensure your insurance policy fits your needs and lifestyle.

Cutting daily expenses

Reviewing your lifestyle and cutting unnecessary expenses is another effective way to manage your budget.

For instance, if you’re able to work from home, consider doing so to save on fuel and maintenance costs. This also has the added benefit of potentially reducing car insurance premiums due to fewer kilometres on the road and a lower risk of accidents.

At home, you can also look to cut costs by lowering your electricity consumption through using efficient energy alternatives.

Reach out for support

Dr Ncube further said, “At Standard Bank Insurance, we understand that these are challenging times, but we are committed to helping our clients navigate them and help them protect what matters most to them. We are always here to listen, support, and work with you to find a solution that eases your financial burden without compromising your long-term financial stability. After assessing your personal circumstances, we can work with you to find a solution that can help ease your financial burden”

Source: IOL

INSURANCE CRIME THREATENS ECONOMIC GROWTH: EXPERT URGES COLLABORATIVE ACTION

Shaun Marshall — Tue, 09 Jan 2024 06:21:51 +0000

Insurance crime, if it continues unabated, could impact the affordability of insurance for everyday South Africans and change the way underwriters view and assess risk.

Dr Jerry Chetty, Head of Business Integrity at Santam, says over the years, insurance crime has succeeded in evading the label of “organised crime” and its effects are often underplayed. But, he says, it is a serious crime.

“The insurance industry is not a standalone sector but is rather a connector of various industries and ultimately, an important component of economic development. Large-scale financial prosperity for example, is connected to increased motor vehicle purchases, increased activity in construction, agriculture, and banking,” says Chetty.

The backbone of these industries is effective risk management, which is where insurance comes in.

“For this reason, a blow dealt to the insurance industry – in this case in the form of growing insurance crime – can catalyse a series of knock-on effects in other sectors, which can hamper economic growth in the long term. This in turn, has direct implications for the individual wellbeing of South Africans as well as the welfare of the collective.”

Double trouble

Chetty explains that insurance crime is typically committed in two ways. In the first instance, individuals inflate a legitimate claim by claiming for items not stolen, lost or damaged thereby dishonestly increasing the value of the claim.

In the second instance, individuals submit false claims by staging incidents, for example, the theft of their assets or vehicles and thereafter submitting claims for these fictitious events.

He says criminals target the most vulnerable persons in society; include the poor, elderly and students.

“There have been cases, for example, in which students in search of accommodation have supplied their personal information to fraudsters under false pretenses – this information is then used in fraudulent claims.

“There have also been instances where criminals dupe the poor into providing personal information and these criminals thereafter use the said information in fraudulent claims,” he says.

Common criminal strategies

According to data collected by Santam, the incidence of insurance crime is evenly divided between motor claims (48%) and non-motor (43%) claims.

Chetty says the most common strategies used by insurance criminals involves claiming for losses incurred prior to the inception of a policy, claiming for false or staged incidents, and submitting false claim information.

He adds the Forensic team recently identified a new and emerging trend which the team termed “community participative” insurance crime.

“In these cases, family members or members of tight-knit communities share information and assist each other in committing insurance crime,” he says.

This “interconnectedness of criminal activity” is also illustrated by the increase in claims related to the theft of keyless cars.

“Tech-savvy criminals have developed tools that can interrupt the signals transmitted from key fobs to keyless cars. These incidents are known as CAN or relay attacks.”

He says another example of this interconnectedness relates to corruption in driver and car licensing departments.

“Corruption results in individuals illegally obtaining drivers licenses which are then used to purchase cars and take out insurance cover … The authorities have confirmed that they will revoke the licences of such individuals. This event has an impact for insurers as they would have to check if such individuals were insured with them and if any motor accident claims were paid out.”

Similarly, criminals have been found to clone vehicles or use damaged vehicles in insurance crime scams.

Delicate balance

According to Chetty, one of the major pitfalls is that insurance crime is seen as a breach of contract, rather than a crime. He says this requires a change from all stakeholders in terms of how they view insurance crime.

“A more meaningful and collaborative process amongst stakeholders to deal with insurance crime will serve as a powerful deterrent and reinforce the measures taken by insurers to protect the sustainability and financial viability of their businesses,” he says.

Chetty adds that insurers must strike a delicate balance between bringing insurance criminals to justice while preventing policyholders from shouldering the true cost of crime through higher premiums and more stringent terms and conditions.

“As a result, we believe preventing the proliferation of insurance crime is not only the responsibility of insurers and law enforcement agencies; the responsibilities also rest with society. Society should be frowning against individuals who celebrate their efforts of defrauding insurers. Rather, the ability of insurance crime to affect lives and livelihoods, makes fighting this scourge everyone’s business,” he says.

Source: Moonstone

TO SOLAR OR NOT TO SOLAR… WHAT DOES YOUR INSURER SAY?

Shaun Marshall — Mon, 18 Dec 2023 08:00:58 +0000

Solar has boomed in South Africa recently, and for good reason. Our prolonged electricity crisis has forced many households and offices to take charge and invest in alternative power solutions.

While we hope for smooth sailing every day, we can’t ignore the reality that, sometimes, unforeseen events arise. And we all know Murphy’s Law… Whether it is theft, floods, winds, hail, golf balls (or hail the size of golf balls), lighting, fire, or power surges – you will be remiss not to secure your investment.

There are many things to consider before installing solar. Here are a few important points:

Reach out to your insurance broker about the best way to protect your investment.
Ensure your roof structure can support the solar system.
To ensure compliance with electrical regulations, the installation must be carried out by a certified electrician who will provide you with a Certificate of Compliance (CoC). Insurers may reject a claim if it is not installed by an accredited supplier.
Solar Insurance is usually not a stand-alone product. It generally falls under your building insurance – depending on several factors, for example whether the system is fixed or not. So, make sure your solar panel system is covered under the right insurance policy to avoid a claim being rejected.
If you live in a complex or estate, you will need permission from your body corporate for the solar installation as they will most likely be the policyholder. Additionally, as the owner, it is important to ensure that the body corporate has solar cover included, or that they increase the sum insured. This might affect your monthly levies.
If you live in an area prone to severe weather, it’s always a good idea to double-check whether your current insurance policy covers these types of damages to your solar panels.
Know what your excess will be on a solar claim.
Read your policy wording carefully so that you know what is covered.

Ensuring you have the correct and sufficient insurance cover in place will give you peace of mind and protect your investment.

Take a friendly step and reach out to us – we’ll be happy to advise on your solar insurance.

Source: Voorpos

TO SOLAR OR NOT TO SOLAR… WHAT DOES YOUR INSURER SAY?

Shaun Marshall — Mon, 27 Nov 2023 06:26:51 +0000

Solar has boomed in South Africa recently, and for good reason. Our prolonged electricity crisis has forced many households and offices to take charge and invest in alternative power solutions.

While we hope for smooth sailing every day, we can’t ignore the reality that sometimes unforeseen events arise. And we all know Murphy’s Law… Whether it is theft, floods, winds, hail, golf balls (or hail the size of golf balls), lighting, fire, or power surges – you will be remiss not to secure your investment.

There are many things to consider before installing solar. Here are a few important points:

Reach out to your insurance broker about the best way to protect your investment.
Ensure your roof structure can support the solar system.
To ensure compliance with electrical regulations, the installation must be carried out by a certified electrician who will provide you with a Certificate of Compliance (CoC). Insurers may reject a claim if it is not installed by an accredited supplier.
Solar Insurance is usually not a stand-alone product. It generally falls under your building insurance – depending on several factors, for example whether the system is fixed or not. So, make sure your solar panel system is covered under the right insurance policy to avoid a claim being rejected.
If you live in a complex or estate, you will need permission from your body corporate for the solar installation as they will most likely be the policyholder. Additionally, as the owner, it is important to ensure that the body corporate has solar cover included, or that they increase the sum insured. This might affect your monthly levies.
If you live in an area prone to severe weather, it’s always a good idea to double-check whether your current insurance policy covers these types of damages to your solar panels.
Know what your excess will be on a solar claim.
Read your policy wording carefully so that you know what is covered.

Ensuring you have the correct and sufficient insurance cover in place will give you peace of mind and protect your investment. Take a friendly step and reach out to us – we’ll be happy to advise on your solar insurance.

Source: Voorpos

Steps insureds can take to enhance their chances of claiming successfully

Shaun Marshall — Mon, 20 Nov 2023 10:51:46 +0000

Cars, homes damaged after freak hail storm rips through parts of Gauteng, including Fourways and Midrand. Picture: Supplied.

Large parts of Johannesburg and Mpumalanga, were hit by a severe hailstorm on Monday, November 13, 2023. Since then, various media platforms have been abuzz with videos and pictures depicting the damage caused by the hailstorm.

Many cars, roads, buildings, infrastructure, establishments were damaged. Naturally, the first thing that the victims think about in such situations is their insurance coverage and whether they can claim.

This is a question that cannot be answered outright. This is because each claim is unique. There are steps that insureds can take to enhance their chances of successfully claiming. Thus, this contribution purports to highlight, albeit briefly, some of these steps.

The point of departure is whether the policy concerned does cover the hailstorm peril. If not, then there is no cover. This can be verified with a broker or directly with the insurer. Importantly, if one is not covered for this peril as a result of a broker’s oversight, there may be a possibility of a legal claim against that particular broker.

There is also a possibility of being “underinsured.” In this case, again, one may have a claim against the broker. Policy clauses should also be carefully considered – exclusions; limitations; and conditions. Insurance policies are ordinarily technical and, therefore, difficult to understand.

There are complex legal rules applicable to the interpretation of insurance contracts. As such, it is recommended that insureds seek legal advice on the interpretation of their policy or consult their broker.

Here are some steps that one should proactively adopt:

Report your claim as soon as possible to your broker/insurer. Most policies have specified periods within which one should report a claim.
Have all the necessary documentation and information readily available regarding your policy.
Take pictures of the damage caused.
Be cautious not to attend to any repairs yourself unless the insurer has agreed to that.
Provide all the documentation and information requested by the insurer as soon as you can.
Be on the lookout for further requests by the insurer.
Provide truthful and accurate information to the assessor.

There is no one-size-fits-all approach to the reporting and handling of insurance claims; however, the steps above can place one in a better position to succeed with a claim. Insureds should also keep in mind the possibility of a claim against their broker.

In conclusion, insureds, when submitting their claims, should always bear in mind their duties towards their insurers. These include acting in good faith; providing truthful and honest information and not being disruptive in the insurer’s investigation; allowing the insurer’s claims handling process to run its course.

Source: IOL

WATCH: One injured after hailstorm pummels Joburg and other areas

Shaun Marshall — Tue, 14 Nov 2023 09:58:30 +0000

The storm caused some damage, including to infrastructure and vehicles.

Large hail stones rained down in Joburg on Monday evening. Photo: X/@Abramjee

Johannesburg Emergency Services (EMS) said one person was injured after a hail storm battered parts of city on Monday.

Residents across the City of Joburg are on Tuesday assessing the damage caused by the large hail stones experienced across Gauteng on Monday evening.

The storm caused some damage, including to infrastructure and vehicles.

Watch the hail storm in Joburg

Social media is abuzz with photos and videos of the hailstorm on various platforms.

High alert

Joburg emergency services Robert Mulaudzi said they were on high alert.

“The City of Johannesburg experienced a hailstorm last night, which affected most of the areas in the city like Braamfontein, Midrand, Sandton, Paulshof and the metro at large.

“There were reports of flooding in Marlboro also. We only had one person who was injured in Orlando East and there were also a number of reports of roads that were affected during the storm last night,” Mulaudzi said.

Mulaudzi said they will be monitoring the weather pattern.

“From our side as the City of Johannesburg Emergency Management Services, we remain on high alert throughout the day monitoring all seven regions of the city so that we can be able to respond to all emergencies which are reported through our emergency call centre.”

Other parts of SA

Meanwhile, the South African Weather Service (Saws) warned of partly cloudy skies, becoming cloudy with isolated showers and thundershowers for most of Gauteng.

Motorists and residents have been advised to take precautions during the adverse weather conditions.

The weather in other parts of the country is expected to be scorching, with Saws issuing advisories and warnings.

“Extremely high fire danger conditions are expected over Khai-Ma Municipality in the Northern Cape, Matzikama, Cederberg and Bergriver municipalities in the Western Cape and over the Dawid Kruiper Municipaltiy in the Northern Cape.

“Extremely hot and uncomfortable conditions are expected over the Western Cape and Namakwa district (Northern Cape) on Tuesday and Wednesday,” Saws said.

Source: The Citizen

Extreme weather and your insurance – Here’s what you need to know ahead of heavy rainfall

Shaun Marshall — Mon, 23 Oct 2023 11:15:30 +0000

South Africans need to be careful and exercise extreme vigilance in the wake of the upcoming rainfall Picture: Bongani Mbatha/African News Agency(ANA)

On Sunday, the SA Weather Service issued a warning of heavy rainfall in KwaZulu-Natal, highlighting the risk of severe flooding in the area and its surrounds.

The World Economic Forum Global Risks Report released earlier this year listed ‘natural disasters and extreme weather’ as the second most severe risk on a worldwide scale over the next 10 years.

With South Africa’s recent surge in floods, the country is not excluded from this list of predicted high-risk areas.

The Western Cape floods, which happened in September, caused extensive damage to homes, businesses and infrastructure in the area.

Moses Khangale, Manager of Stakeholder Programmes at Santam, has advised those living in the forewarned areas prone to extreme flooding to take precautions.

‘’South Africans need to be careful and exercise extreme vigilance in the wake of the upcoming rainfall as predicted by the SA Weather Service and take precautionary steps to lower risks of loss or injury associated to the effects the floods could have on you or your property,” said Khangale.

He shares these tips below:

Driving through a downpour

If possible, avoid areas prone to flooding – particularly in periods of heavy downpours.
Monitor the local radio stations in your area for weather and traffic updates and plan your route accordingly.
Reduce your driving speed in rainy conditions and increase your following distance from the vehicle in front of you.
Make sure your headlights are switched on (Do not put these on the bright setting).
Be alert and be aware of the vehicles around you – particularly in times of poor visibility.
Obey the rules of the road, especially any temporary signage or hazard warnings around flooding.

Should you find yourself in deep water

Stay calm and stay alert – do not panic.
Avoid driving through sections of water where you are unable to see the road. This is both risky and dangerous.
Do not drive around or through barricades – they have been put there for your safety.
Should your vehicle be trapped by rising water, stop, then get out of the car and move to safer or higher ground. Your safety and the safety of your passengers is more important than your vehicle.

How to protect your house:

Clear gutters of debris frequently to ensure less chance of overflow that could lead to water push backs and potential internal water damage.
Inspect the roof regularly and be vigilant about maintaining it.
Keep trees and shrubs trimmed to prevent branch or debris damage to a home.
Secure outdoor furniture or move it under cover.
Ensure that your home and household contents are insured for the correct replacement value.

Source: IOL

All insurance is not the same: Why all insurance policies are not created equal

Shaun Marshall — Mon, 18 Sep 2023 09:51:38 +0000

Insurance terminology

Being afforded the agency to protect ourselves, our families, our homes, and our belongings from any negative unforeseen circumstances is the best way to ensure peace of mind for any human.

While that’s true, the road to getting there is easier said than done when considering the myriad choices around insurance cover that we have today. Deciding which policy to choose can be a confusing and complex affair.

Historically, one of the only ways to make this decision has been to compare prices and choose the most affordable cover without much consideration for the quality of cover.

Consumers had little to no insight into the many intricacies of insurance policies, as acquiring coverage was either done via a call centre, a direct insurer, an insurance agent who only offered one product or it was left to third parties such as an insurance broker to make this choice on your behalf.

Even today, many insurance companies often advertise to consumers, promising to match or beat the premiums you pay if you switch over to them, again, with no reference to scope of cover or any restrictions on their policy. This is almost as absurd as offering to match the price of a car you’re buying without asking what car it is.

Although cost savings are important, it’s not really the best determinant in acquiring the best insurance cover because – simply put – not all insurance products are created equal. For example, an insurer might be offering motor vehicle or household insurance that looks similar to others in the market at a lower price, but on closer inspection, the lower priced product might have restrictions such as “you’re not allowed to use the vehicle to drive to work/meetings”, or have cover exclusions such as “hail damage is not covered”, or warranties such as “your watches worth more the R5000 must be kept in a locked safe at all times when not being worn”.

These are obviously material to know and may not be the case on your higher priced product which may also come with a lower excess and a better claim processing experience.

So, today, with so much more information at the consumer’s fingertips and direct online access to click-to-buy digital insurance marketplaces, it’s important for consumers to take the time, shop around, and compare insurance options beyond just premiums.

Here are four factors to look out for before making a purchasing decision on any insurance coverage, from personal car, household and medical insurance, to business insurance or life, personal accident and disability cover:

1. What is the basis of cover – All Risks vs Defined Perils

Insurance policies or sections of a policy provide cover on either a “defined perils basis” or on an “all risks basis” and both these policy types operate fundamentally differently.

With a Defined Perils policy you are explicitly told what you are covered against, for example “fire, storm, explosion, theft, etc.” and when you have a claim you need to show that the cause was one of these pre-defined perils.

Whereas the All Risks policy turns this on its head and covers you against everything that could go wrong except specifically what it says is not covered, so when you have a claim, the insurer will pay unless they are able to show that the cause of the loss was one of the specifically excluded perils.

The All Risks policies are often broader in coverage and easier to deal with at claim stage but may come at a higher cost.

2. Pay attention to Exclusions

It can be easy to get wrapped up in the relief of knowing all the things you will be covered for when choosing an insurance policy but what can often go unnoticed (with detrimental effects in the future) is what is not covered.

All insurance products include exclusions in their contracts, for example, policies universally exclude losses caused by war, nuclear contamination, and recently in South Africa, electricity grid failure. In addition to these universal exclusions there are many “discretionary” exclusions that vary from insurer to insurer and even from one product to another with the same insurer.

Although it’s not possible or necessary for your insurance policy to cover every single eventuality – you personally might not need your home insurance to cover damage caused by pets or don’t need a hired car when you have an accident- it’s best to be aware of what is and isn’t included or excluded in your cover so that you’re not surprised by it later.

Thousands of businesses thought they were covered against the revenue losses arising from the business interruptions due to the Covid lockdown only to find that this was considered an exclusion on most policies. For many of them insurers enforced the exclusion and this was the difference between surviving the crisis or shutting their doors.

Trying to navigate the fine print can be daunting. Fortunately resources like comparative sites facilitate this for you with clear tables showing what is and isn’t covered.

3. Not all insurers are equal

All insurers registered to operate in SA are regulated and supervised by the Financial Sector Conduct Authority (FSCA) which should give one a lot of comfort when buying a policy but beyond meeting the minimum regulatory requirements there are critical nuances that distinguish one insurer from another.

Most important is an insurer’s ability to pay claims which is largely determined by the adequacy of their capital reserves, how liquid or available this capital is and by how much it exceeds the insurer’s claims and other financial liabilities. This is a complex calculation that changes from month to month, making it challenging for the average consumer to easily determine this.

But it’s important to know that this ranges from a ratio of 1 (meaning the insurer has the absolute minimum capital available to pay claims) and say 2,5 (the insurer has a very significant buffer of more than double what they require to pay claims). In the latter case your cover is “safe” even if the insurer got their calculations wrong or they experience a catastrophe resulting in a deluge of unexpected claims – not so with the former insurer.

The ability (having enough cash) to pay claims is one thing but the desire and likelihood of paying a claim is quite different. This is a subjective and difficult to quantify issue but, in our experience, we come across two distinct attitudes in insurers – those who look for ways to pay your claim even when it is a marginal call and those who look for reasons not to pay even when it is a cut and dried case – and it all comes down to the values and ethics of the insurer.

Fortunately the FSCA, independent ratings agencies and even digital marketplaces like Everything.Insure have developed a proprietary rating scheme that takes available data and objectively measures an insurer and awards it a star rating that makes comparing insurers quite simple for ordinary consumers.

4. Enhanced customer experience

The customer experience bar in most industries has been raised significantly with self-service apps and interactive interfaces on websites that intuitively guide you through your online journey, many with “mind-reading” predictive capability. Unlike its more glamorous sister industry, banking, the insurance industry is very late to this game and remains largely paper- and person-based with only very recent and sporadic forays into Insurtech and digital self-service.

With the Covid lockdown pushing us to finally take the online shopping plunge many have found the experience pleasant and almost a mandatory requirement when dealing with a vendor; so much so, that we find it archaic and frustrating when we can’t just go online and do it ourselves. If this is you then be sure that your insurance provider is one that has made the transition (and the investment) in digitising their business and is able to give you that “anything-anytime-anywhere” experience or else you will be disappointed.

And when you are making this choice be sure that it is a true end-to-end digital experience and not a pseudo one where prices are indicative and you have to go offline to a call centre to complete the transaction. Make sure it’s a true digital marketplace and not just a digital brochure dressed up like a marketplace. Also ensure that it’s not just the sale that’s online but all the attendant onboarding processes (underwriting) as well as the rest of the life cycle (claims, amendments, pausing, cancelling, etc).

The international poster-child for this sort of digital-native, digital-first, digital-fully insurance business is Lemonade Insurance that launched to much fanfare in New York in 2020. Locally, good exponents of this would be Naked Insurance and Pineapple which offer you their own product in a fully digital lifecycle and Everything.Insure which offers you a digital marketplace with many insurers’ products and a fully digital experience too.

Finally, the problem with digital-only is that it can be frustrating when you just want to talk to someone, so be sure that your provider of choice provides the careful balance of digital services when you want them and also offers the human touch where needed.

Choosing an insurance provider, policy, and coverage is a daunting task. But, armed with more information at your fingertips than ever before, and properly considering the above 4 factors means making the right decision for you and your household doesn’t need to be onerous or risky.

By Vis Govender, Co-founder of Everything.Insure and Group CEO of FirstEquity Group

Source: InsuranceChat

Surge in solar panel theft during load shedding

Shaun Marshall — Mon, 07 Aug 2023 07:55:19 +0000

Solar panels have become targets of theft during rolling blackouts. Picture: Armand Hough/African News Agency(ANA)

Even as embattled South Africans face hours of darkness, there is an another threat looming: home-break-ins and thefts targeting equipment to avert powerlessness.

As load shedding hours grew longer, South Africa saw a boom in small-scale solar installations, and the sale of generators, inverters, and modular uninterruptible power supply (UPS) devices.

Insurance company Auto & General said it had seen an increase in home break-ins and load shedding was one of the contributing factors.

“Solar panel theft is an emerging trend, one that we are keeping an eye on,” said chief executive officer Ricardo Coetzee.

The company also said its data covering the first 16 days of January 2022 and January 2023, showed there was a 40% increase in burglaries during load shedding.

Security company Fidelity Services Group said solar panels were targeted because they did not have serial numbers and if they did, they were on a sticker which could be removed easily.

Fidelity spokesperson Charnel Hattingh said: “There are a couple of companies investing in products that have been available to track panels. It is, however, very expensive.”

She said the agricultural sector was investigating technology to link a panel to its buyer or owner.

“The idea would be to have a communication grid as well. As these panels are being moved past these technology readers or gateway points, they would be monitored in control rooms with software for despatching and recovering the devices. It would be a way to make sure the panel becomes inoperable, should the security tag be removed,” said Hattingh.

She also said there seemed to be more cases reported when commercial properties were unoccupied such as over weekends when staff members were not on site.

Hattingh said solar panels were also often not monitored by existing security systems such as alarms, and security gates and electric fencing did not deter thieves.

“It seems that batteries are also popular targets for thieves when they gain access to a property.”

She said thieves who strike during load shedding or when properties were unoccupied would have enough time to dismantle the system before fleeing.

“Stolen items are, in our experience, often sold to people who are looking to use it as scrap materials or as their own alternative energy source.”

Another insurer said their data did not indicate an increase in load shedding-related thefts or burglaries, but this did not indicate that solar panels and other back-up systems were not vulnerable to theft.

Tarina Vlok, managing director of Elite Risk Acceptances, a subsidiary of Old Mutual Insure, said the unstable power supply causing damage to property was more of a problem.

“A much bigger concern is the increase in power surge damages and related claims due to the impact of load shedding. Most insurers have implemented measures to limit their exposure to these claims,” she added.

Meanwhile, Western Cape Premier Alan Winde said people often complained to him about the link between load shedding and crime.

“Criminals are taking full advantage of rolling blackouts, preying on law-abiding citizens under the cover of darkness,” he said.

Statistics compiled by the SAPS in the Western Cape show the correlation between load shedding and crime.

In Macassar, ward councillor Peter Helfrich said it would be amiss of him not to point out that the criminal activities, and especially the dumping of bodies, in their ward seemed to coincide with load shedding, and especially the extended Eskom power outages they were experiencing.

Western Cape police spokesperson Colonel Andre Traut said various factors influenced crime patterns in certain neighbourhoods, or certain times of the day, and it was no secret that criminals preferred the dark over well-lit areas to perpetrate a crime.

“The reasons are obvious as there is a smaller chance that he or she will be identifiable and the chances of fleeing the scene undetected are greater. Load shedding unfortunately creates this opportunity for criminals, however, the respective communities are not left at their own fate during these schedules as visible policing is also heightened to neutralise the situation,” he said. ‒ Additional reporting Chrislynn Sias.

Source: IOL