South African Flood Damage Could Cost Insurers Millions

Insurance companies could pay out millions for flood damage Only 35% of South African insure their cars.

Santam, one of the largest insurance groups in South Africa, said that the damage caused by recent floods in the country could run into millions of rands.

Homes, property and vehicles were all damaged in the floods, while loss of revenue also had to be taken into account.

Santam said that damage will continue to rise as weather remains erratic across the world.

"Climatologists and meteorologists expect wet weather to continue well into March and even April," said the head of personal lines underwriting at Santam, Shehnaz Somers.

"This is cause for concern, especially for those what have not insured their property or vehicles, or those who have under insured their valuables to save on insurance premiums."

"The danger of under-insuring your property and vehicle is that the payout, when claiming, can be less than the replacement value," said Somers.

Unfortunately, underinsurance is a serious problem in South Africa, with only 35% of all drivers insuring their cars.

"Suffering flood damage to a home or vehicle and not having insurance to cover your loss could very well cripple a family financially," said Somers.

Somers also said that loss relating to flood damage is usually covered as part of a more comprehensive plan and, while claims are assess on the exact circumstances under which they have occurred, "the outcome of such a loss is always easier to deal with when you know that your insurer will cover your loss."

Insurance groups are hoping that the latest floods serve as a wakeup call to South Africans who go by the philosophy that "it won't happen to me" and encourage them to take out proper insurance on their life and their property.