Do South Africans have the right insurance measures in place to protect them against disaster?

Consumers don’t understand the ins and outs of their insurance and run at a loss, the FAIS Ombud has raised concerns that the rejection rate for claims is high. File picture: Andrew Ingram

Consumers don’t understand the ins and outs of their insurance and run at a loss, the FAIS Ombud has raised concerns that the rejection rate for claims is high. File picture: Andrew Ingram

Published Jun 6, 2022

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Cape Town - Climate change has had a massive impact on many South Africans and one thing has become apparent – having adequate insurance helps to protect yourself and your assets in the case of emergency.

Following the devastating floods in KwaZulu-Natal, costing over 400 lives and R12 billion in infrastructure costs, it highlights a risk South Africans cannot ignore and that’s the adverse effects of climate change.

“An increase in extreme weather events like floods, fires and storms will have a massive financial impact on South Africans. Not only will it result in an increase in insurance premiums, but the cost of food, clothing and electricity will rise too,” Bradley Du Chenne, the CEO of insurance and financial product comparison site Hippo.co.za said.

Consumers don’t understand the ins and outs of their insurance and run at a loss, the FAIS Ombud has raised concerns that the rejection rate for claims is high. In the case of floods and other natural disaster, consumers don’t want to run at a risk consumers need to know valuable information to safeguard themselves.

Many insurers are involved in the funding research and future-proofing effective insurance against natural disasters. There is valuable information that South Africans need to safeguard themselves so they are adequately prepared for any possible disaster.

Tips include reviewing insurance policies once a year to see how much you’re covered for, beware of under-insurance, understanding replacement value, updating of home inventory, getting correct valuations and understanding cover.

“With the continued threat of severe weather, one simply cannot afford to be under-insured or worse, uninsured. On the other hand, avoid over-estimating replacement values because this will result in you being over-insured, and you will be throwing money away unnecessarily every month,” he says.

Du Chenne says that it is important for consumers to understand their insurance portfolio, and what it will and won’t do for you. He adds that knowing what your insurance covers is crucial to being properly protected.