South Africans recently witnessed unprecedented violence, looting and destruction of infrastructure and businesses in parts of the country. The scale of the damage (estimated to have cost business owners billions of rands) has given rise to many questions about claims and whether insurance companies will provide cover for the massive losses caused by the unrest.
“We’ve seen a lot of false and unhelpful information being shared online and on social media about cover for civil unrest, and we thought it would be helpful to set the record straight,” says Dotsure Chief Operating Officer David Roache.
“It is true that the South African Special Risk Insurance Association (Sasria) is the only insurer in South Africa that provides cover for damage caused during politically motivated riots, strikes and civil or public commotions.
“But Sasria cover forms part of many policies. Dotsure, like other insurance companies, is an agent of Sasria working with the state-owned enterprise to provide cover for damage or loss due to riots, strikes and public disorder.”
Sasria has assured the public that it is “well capitalised” and has adequate reinsurance programmes with A-rated reinsurers. The state-owned enterprise is also confident that it will be able to pay out the anticipated claims.
Despite these assurances, says Roache, misinformation is being peddled on social media regarding insurance cover and civil unrest and Dotsure wants to debunk the myths and help businesses get back on their feet.
Here are some common untruths and misconceptions:
Insurance companies will not provide cover for your business if it was affected by violence and looting.
This is false. If Sasria cover is added to your policy, your business is insured against any damage caused during any politically motivated riot, strike or civil or public commotion. Therefore, when you make a claim, the insurer will deal with Sasria on your behalf.
There will be excess payments due when I claim for damage to my car caused by civil unrest.
This is false. The motor cover from Sasria will cover motor cars, light delivery vehicles, commercial vehicles, fleet cars, motor traders, mobile plants (i.e. equipment like cranes), buses, rapid transport buses and trailers in the event of damage as a result of strikes or riots. Excess payments are not required. (These only apply to construction works.)
A picture of the damage is enough to lodge a claim after your business is affected by violence and looting.
This is false. Insurers differ but typical documents required when making a claim include photographs accompanied by other relevant documents. For example, for motor claims, you require a claim form, a police case number, a copy of your driver’s license, a copy of your identity document, a sketch of the accident, details of the other party (if relevant), details of witnesses and photographs relevant to the accident that can supplement the statement on the claim form.
For a building- or contents-related claim, you need a claim form, police case number or accident report, a list of the affected goods, a quotation for the replacement of the property, invoices if emergency repairs have been paid for and a firefighting services report, if relevant.
The above are typical documents required by insurers, but additional information may in certain instances be requested.
If my business was affected by violence and looting, it will take years for my claim to be processed.
Sasria has committed to expediting smaller claims to ensure that businesses affected by the recent unrest are paid out quickly. The state-owned enterprise has also extended the mandates of insurers to settle all claims (personal and commercial) to the tune of R500 000 for personal claims and R1 million for commercial claims.
To help large corporations to start the rebuilding process, Sasria has also committed to making interim payments. In times like these, when claim volumes are high, claim settlements can be relatively slow. However, many insurance companies are working with Sasria to ensure that claimants are paid and businesses can rebuild and contribute to the economy.
Insurance companies will not pay my claim, even if I qualify to be paid out.
This is false. Whether or not insurers pay a claim is completely reliant on the contract (and the policy wording). The same applies to Sasria claims. This is why it is important for clients to know exactly what they are covered for.
So, will insurers have the necessary funds to cover a catastrophic event like the recent looting? The answer is yes – insurers are legally obliged to hold reserves to account for huge incidents such as riots and large-scale destruction of property.
If a claim is wrongfully declined, there is recourse – the client can contact the relevant Ombudsman to take up the matter on their behalf if they have a valid objection.
It is complicated and stressful to claim from Sasria.
This is false. Your insurance company will act as a middleman to claim from Sasria. You don’t have to claim directly – you can go via your insurance company as you would with any other claim.
Dotsure urges all business owners and individuals to review their cover and ensure that Sasria protection has been added to their policies.