With the recent devastating fires sweeping the coastal town of Knysna, many home owners without the proper insurance are now left homeless, and in debt. At the same time the worst storm in three decades hit the Western Cape shores, causing a destruction all on its own, again highlighting the need for home insurance.
But do you as a current or potential home owner understand how certain factors affect your premium rates? Your property location is one of those very important factors.
With countless people being displaced and numerous properties destroyed during these disasters which took place in the first week of June 2017, insurance claims have been streaming in and leaving the insurance industry in excess of R4bn. All of this will lead to an increase of premiums in those areas.
Do you live along the coast or near a body of water such as a river or a dam? This increases the risk of flooding. Do you live in an area prone to severe storms or known for its seasonal outbreaks of wildfires? With inevitable climate change comes a frequency of more severe natural disasters, all of which have an impact on insurance premiums, especially if you live in a “high risk” area.
Something as simple as your proximity to building materials for repairs after a disaster has struck could quite possibly also affect your monthly premium.
Does this mean you shouldn’t buy your dream home along the Garden Route? Definitely not. What you should do, is to assess the risks involved with the location of your potential property; find out from people in your desired neighbourhood about potential risks; speak with your insurance broker to discuss what measures you as a home owner can take to reduce the risks associated with your property location and what you can do to lower them.
One can never be 100% prepared for a natural disaster, and no amount of money can really replace what you lose during a horrific incident, but as long as you are aware of the implications it could have on your monthly budget, and make sure that you are covered against the elements, you will be able to rebuild and recover.
Harcourts Maynayrd Burgoyne Prinicpal