Prepare for the unexpected

December 2010

2010 has seen an unpredictable spate of weather disasters across the globe and South Africa has not been exempt. Floods in Kwa-Zulu Natal, a wet summer in Gauteng, flooding in the Free State, droughts in the Eastern Cape and freak storms in the Western Cape have cost the country and insurance companies millions of rands in weather-related damage.

According to Melody Redman, general manager of Budget Insurance Brokers: "Many South Africans choose to 'go bare' when it comes to insurance, reasoning that these remote risks aren't worth the cost of coverage. Yet insurance is essential for this exact reason! You cannot predict the future, and that is why you need insurance."

Redman continues: "Insurance is best used to protect ourselves against financially devastating events, and unpredictable weather patterns certainly qualify. Losing your possessions can be crippling. Many people who find themselves in this extremely unfortunate position are unable to manage the costs of replacing their belongings and end up in financial difficulties as a result."

Most insurance companies, like Budget Insurance Brokers, offers cover for the loss or damage caused by fire, lightning, explosion, falling trees (but not while they are being felled), earthquake (but not from mining operations), storm or flood. At Budget, this cover is included in its home contents insurance package and does not come at an additional cost.

"Although these events are seldom and are very unlikely to occur in certain areas, for peace of mind insurance is a necessity and should not be overlooked," says Redman.

Budget Insurance Brokers offers the following tips to find out what your insurance policy does and does not cover:

1. Know your insurance policy inside and out – make sure you are aware of what you are covered for and what you are not covered for. All this information will be in your policy schedule. Don't forget to read the fine print in your policy book too!
2. Assess whether or not you live in a high-risk area - Most homeowners tend to downplay the risks they face, even if they're living in a flood prone area.
3. Talk to your insurer – your insurer will be able to explain in detail all the inclusions and exclusions on a policy document. He/she will also be able to provide advice on what cover would be appropriate to a particular client's needs and budget, helping the client to decide on which product or combination of products to choose.

"The adage - it can never happen to me – does not apply in this case and it is always better to be safe rather than sorry. We urge consumers not to overlook the benefits and the necessity of insurance, whether they live in an area prone to natural disasters or not," concludes Redman.