By Angelique Ruzicka, editor, Jusmoney.co.za
The fire which ripped through Cape Town’s mountains and homes destroying structures and injuring and killing wild and domestic animals at the beginning of March is under control. But now people have to count the costs of the damage to their homes and businesses. According to reports, at least 13 homes have been destroyed in the blaze but it’s certain that other claims are still to follow.
“Business and agriculture claims could take a while to be processed, especially when it comes to business interruption cover. We have only had one [claim] but I think there is still a lot that needs to be determined,” said Lizette Erasmus, head of insurance expertise at intermediary Integrisure.
But not all home owners were insured against the blaze. A couple told Carte Blanche how, together with neighbours, they tried to prevent their home from being engulfed by flames.
But unfortunately their home became a victim of the fire and they lost everything as they had not insured the home they had built over the years yet.
But if you are covered by an insurer for your contents and your home against perils like fire, are you covered in full? Erasmus points out that there can be some exclusions: “Some of the products I have seen in the industry don’t give you full cover when it comes to fire brigade charges or are very limited. Those costs can really add up.
“Then you have extensions to assist you with alternative accommodation during the restoration period. Because if your home was severely damaged it could be unoccupied or uninhabitable for several months. So it’s very important that your policy has this type of cover. Too often consumers think ‘This will never happen to me’ and then it does.”
Sadly, looters have targeted some homes that have been evacuated as a result of the blaze. But if you have to evacuate your home in an emergency and you don’t have the time to secure it properly you should still be covered too says Erasmus: “Your policy would cover you for theft and burglary. If you were to evacuate your home due to the raging fire I can’t foresee any insurers would repudiate because it is an emergency situation and there is Treating Customer Fairly rules. If a situation is out of the consumer’s control then they shouldn’t be penalised in any way.”
Why less isn’t always more
While it’s important to compare costs of insurance every year at the very least to ensure you are getting an affordable deal, Erasmus warns against going for cover that is too cheap. “Be careful when you go for a cheaper insurance option. Very often you have less cover so it’s vital to discover whether you do still have the same cover in place when you are paying a cheaper premium.”
Business owners must ensure they have adequate cover too. While some business premises may not have been destroyed in the blaze, they could be affected in other ways when disaster strikes. If employees and customers can’t access a business the insurance, if it is covered for, kicks in.
“When it comes to businesses it’s vital for them to ensure that they have business interruption cover because it could take months to rebuild your business and you might not be able to relocate to other premises, for example if you have a lodge or a guest house.
“If you are in the manufacturing industry you may be penalised as you can’t make deadlines to do the deliveries due to losses from fire or any other incidences. So it’s important to sit down with your broker and do a proper risk analysis and have a proper disaster recovery plan in place. If something happens with your business find out how will you get hold of your clients, your debtors etc. Brokers do know how to compile such a risk plan,” says Erasmus.
Be ready and take action
Erasmus explains that ultimately, if you live in a high fire danger area, it’s best to be prepared. “Residents living in that area where they know they are exposed to these type of fires on an annual basis must teach even their children that exit keys are kept at a specific point.”
She adds that it’s essential to keep vital documents all in one place so that they can be taken with after the family and pets have been secured.
“Ensure that ID documents, birth certificates, vehicle licenses and other valuable documents are kept in a safe accessible place so if you need to evacuate you can take these documents with so you are able to carry on with your life from a financial point of view. You need to be able to take one box or one file where all the essentials are in one place.”
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