Climate-related catastrophes such as floods and storms continue to exert a significant toll on both consumers and society at large, greatly affecting South Africa’s socio-economic landscape.
The South African Insurance Association (SAIA) has observed a notable surge in weather-related insurance claims among its member companies for both property and motor insurance, underscoring the growing vulnerability of individuals and communities to climate change risks.
South Africa experienced severe weather events that resulted in more than 400 deaths and destruction of more than 12 000 homes in 2022. In KwaZulu-Natal, the floods were the most catastrophic natural disaster to hit South Africa in living memory, leading to billions of Rands in economic losses. According to the Western Cape government, at least R3.5 billion worth of infrastructure was destroyed in two major floods in June and September last year. Such devastating events have a huge impact on the well-being of communities.
In response to this escalating trend, SAIA remains committed to enhancing consumer awareness and promoting risk management frameworks. By advocating for the adoption of non-life insurance products and services as integral components of comprehensive risk mitigation measures, SAIA aims to empower individuals and households to navigate the evolving challenges posed by climate change.
“While successful weather-related insurance claims provide policyholders with the leverage to restore their financial position to that before they suffered a loss and/or damage to their insured assets, it’s crucial to make proactive improvements to your property to ensure it becomes a climate-resilient home,” said Themba Palagangwe, SAIA General Manager: Governance and Transformation.
To manage climate change risks, policyholders should make climate-resilient improvements such as:
- Improving drainage;
- Using fire-resistant materials;
- Storing generators and batteries safely;
- Maintaining home structures, roofs, solar panels, gutters; and
- Electrical compliance.
SAIA emphasizes the importance of engaging with insurers to gain a comprehensive understanding of insurance policies and to explore avenues for mitigating climate-related risks.
“The non-life insurance industry offers solutions to protect consumers from financial loss due to unforeseen circumstances, such as home insurance and contents insurance. Consumers should familiarise themselves with their insurance policies and engage with insurers on issues related to climate change,” said Palagangwe
Climate change has also had a significant impact on motor insurance in South Africa, with recent floods, hail and storms causing severe damage to vehicles. Many people have been financially affected and some have lost their lives. For many citizens, owning a motor vehicle is essential and often a source of income. Damage to or loss of their vehicles can cause significant financial hardship.
SAIA encourages policyholders to install and use weather apps, keep their vehicles roadworthy and repair damaged or faulty parts. In addition, safe driving behaviours such as not drinking and driving, avoiding driving during bad weather or parking under objects that may be at risk of damage due to the weather, e.g. big trees or bridges, can help reduce risk exposure.
To protect their assets, consumers should be familiar with their insurance policies, ensure their premiums are up to date and communicate with insurers about coverage issues.