It is estimated that damage caused during storms in South Africa on Tuesday will cost the insurance industry up to 2.0 billion Rand (about 140 million US dollars) in claims.
The insurance industry said Wednesday it had the capacity to settle most of these claims and was adamant that this would not necessarily lead to premiums going up.
Insurance companies said claims had escalated by between 40 and 60 per cent across the country since the start of the bad weather. About 80 per cent of the claims are for homes and buildings and most of these are in the provinces of KwaZulu-Natal and Gauteng.
As for home owners who do not have insurance cover, the head of claims at Mutual and Federal, Michelle Van Staden, said: "A lot of houses in the area of Tembisa (township near Johannesburg) that were hit by the tornado yesterday (Tuesday) were also not insured and that now becomes the obligation of government to fulfil."
Insurance is usually compulsory if you have a home loan. However, the township market is beginning to realise the importance of insuring their homes, even if they don't have a bond.
"People work hard for their properties and all their possessions and it is important to protect your assets because you work hard for them and the township market is now realising how important insurance is," said the Co-Founder of Mzizi Financial Services, Brian Mdluli.
Experts agree that the escalating costs of insurance discouraged many from taking out cover. They admit a lot still needs to be done to tailor-make insurance cover that will be accessible to many.
Source: NAM NEWS NETWORK