Severe SA weather patterns lead to spike in insurance claims

Increasing weather-related damage to property as a result of severe weather conditions over the past year, has led to a sharp rise in insurance claims by homeowners in South Africa. As a result, homeowners are being urged to review their home insurance policies ahead of further expected cold spells and rainfall in the coming months.

According to Andrew Lilley, Chief Operations Officer of CIB Insurance Solutions, this year alone there has been a 30% increase in weather-related insurance claims for property. “Heavier than normal rainfall resulted in abnormal flooding in both Joburg and many coastal areas over the past year, prompting a spike in insurance claims from homeowners. With the rainy season starting again in the Western Cape, we expect this to increase further in the coming months.”

Lilley says that while normal rainfall is not likely to cause damage to houses, the heavier rains that are now being experienced in South Africa mean more homeowners are starting to file claims for leaks in their roofs, as well as rising damp and flooding.

“Many of these claims are justified as homeowners take out buildings insurance specifically to deal with such problems, however, people must be aware that there is also some responsibility placed with the homeowner to upkeep their home properly.”

He cautions that if your property has not been properly maintained then this could cause a problem when submitting a claim. “If you notice damp or moisture occurring on the ceilings or walls of your house and don’t have this seen to, it can lead to a serious problem later on.”

Lilley says it is important homeowners start looking at their home as they would their car. “If your car is damaged or starts making a strange noise, you take it straight to a mechanic to have it looked at. The same should be true for your house. A property needs the same level of attention and a small cost for maintenance now is far better than the cost of fixing a more severe problem later on.”

“People often consider vehicle insurance to be more important than home insurance, as they are more concerned about the theft of their vehicle than anything else. However, it is just as important to make sure that your home is adequately insured, particularly with the increase in serious weather conditions,” says Lilley.

Lilley says homeowners can do some basic checks in order to minimise the possible impact from severe weather conditions:

· Ensure that your property has adequate drainage;

· Make sure that all roof surfaces are maintained on a regular basis;

· Check that your roof and ridges have been adequately waterproofed;

· Ensure that all gutters are clear from obstructions or blockages;

· Have your house checked twice a year for signs of damage and wear and tear.

Source : fanews

WHY IT'S IMPORTANT TO HAVE A WILL

Death is not a pleasant topic, but neglecting to get your affairs in order can leave your loved ones dealing with more than bereavement.

If you die intestate, without leaving a valid will, your assets will be divided as provided for in the laws of succession. Only your family qualifies as heirs in terms of the laws of succession, however, they may not inherit in the proportions that you had in mind. Winding up of your estate will also take longer and your loved ones will pay more estate duty than would have been the case if you'd had a valid will.

What makes a will valid?

You must be older than 16 years and be of sound mind when drafting your will. You must sign every page in the presence of two competent witnesses, who are not beneficiaries in terms of the will. The witnesses must also sign every page. It is preferable that your will be drafted and typed by a professional. Handwritten wills or a will typed by you is not invalid but may lead to misunderstandings and even malpractices. The will must also be dated at the end thereof. If you are at all uncertain about the drafting of your will consult a attorney, accountant or trust company. It costs a few hundred rand but is worth the expense.

What must be written in your will?

Clear instructions about the division of your assets after your death should be contained in your will. You also have to appoint an executor who will handle your estate after your death. The executor ensures that your debts are paid and your estate distributed to your beneficiaries in accordance with your wishes. An executor must preferably be someone with the knowledge, expertise and time to take on the responsibility. Should you appoint someone who, in the opinion of the Master of the High Court, does not possess sufficient knowledge and expertise, the Master will insist on the appointment of an agent to attend to the administration of the estate. The executor is entitled to 3,5% of the value of the estate plus VAT, as remuneration. If you have minor children a guardian must also be appointed in your will.

Remember

 Before drafting a will, make a list of your assets, ensuring that everything has been included in your will.
 Your heirs must pay 20% estate duty on assets above the first R 2,5 million rand of your estate. No estate duty is payable on assets bequeathed to your spouse. A spouse also includes someone with whom you have had a long-term relationship, even though you were never married.
 Any special arrangements regarding your funeral should be conveyed to your loved ones during your lifetime. Will are normally only read after your funeral and is it therefore important that your loved ones are aware of your wishes.
 Preferably do not leave assets such as a single house to several people as it leads to squabbling.
 If you have minor children or other dependants it is advisable that you create a testamentary trust to provide for them. The trust safeguards your assets until your children reach majority or a predetermined age. The trust only becomes effective after your death.
 Another kind of trust is a living or inter vivos trust, which is created while you are alive. You can appoint the trustees, including yourself, to manage the assets of the trust. An inter vivos trust should be considered if your assets exceed R 2,5 million. This can save on estate duty.

Please contact us on 0861 10 12 20 to assist with your will.

Insurance Blacklisting - Know your rights

People freely talk about being 'blacklisted' by short-term insurance companies. Not only is there not such a thing, there is also a wrong perception about the real situation," says Steve Zietsman, Head of Marketing and Communication at Santam, SA's largest short-term insurer.

Zietsman says short-term insurance companies have a duty to manage their risks prudently and properly in order to keep their insurance premiums at an affordable level, in the interest of its clients.

In doing so, they have to deal with three matters:

1. People exposed to unacceptably high risks

2. People who are "moral risks". This is where a fraudulent activity was identified in a persons dealing with a specific company, either in underwriting or through the submission of a false claim

3. Duplicate claims being submitted to more than one company (fraudulent claims)

It is not uncommon that an insurance companys exposure to risk becomes unacceptably high due to either the failure or the inability of a policyholder to keep risks within reasonable limits. When this happens we sometimes find it necessary to cancel such a policy, in which case the company is no longer prepared to extend the particular insurance cover to the client, given that person's circumstances.

"For instance, if a person has had a policy with us for 50 years, with minimal claims, and at the age of 70 starts becoming involved in two accidents every month. Although we will initially pay out, it becomes apparent that this person is now too high a risk - they shouldn't be driving a vehicle - and they may become uninsurable risks.

"Similarly, if a person lives in an area with high water levels resulting in frequent flooding of their home, or in a high crime area against which they are unable to provide sufficient security, they become a 'geographical risk' and may become uninsurable." However, emphasises Zietsman, should they move to a safer suburb, where flooding or robbery is less likely to occur, they will once again be able to obtain insurance.

Zietsman says even if a claimant has an excellent track record, if there is a sudden spate of claims, whether petty or large, this automatically rings alarm bells and we will investigate and cancel a policy if it is found that the risk is becoming unacceptably high.

The common perception that people who have had their policies cancelled are placed on a blacklist that is shared among other companies is altogether wrong. What is true, though, is that anyone has to disclose such information, should they be asked by another company whether they have previously had insurance cover terminated because of unacceptable risks. It is up to the other company to decide whether they are happy to accept such risk, and at what price.

A number of companies in the insurance industry also share in a common database of claims information. The aim is to identify possible duplicate claims (thus fraudulent conduct) and to safeguard honest clients from the unnecessary penalties that may result.

A company may also decide to cancel a policy on the basis of "moral risk" - where a fraudulent activity was identified in a persons dealing with the company, either in underwriting, or through the submission of a false claim.

"We constantly remind policyholders to take all precautions and care to prevent or minimise loss or damage to their possessions - if it is clear that this is not happening - it wouldnt make commercial sense for us to continue paying out claims which ultimately push up premiums for everyone else."

"If you work through a broker they will automatically take up an unjust cancellation with the insurer, however, if you do not work through a broker, you have every right to put your argument forward to the insurer directly or, alternatively, to contact the Insurance Ombudsman on 0860 726 890.

"The Ombudsman is an impartial mechanism through which the industry ensures policyholders receive fair treatment and service, and it provides a fast-acting, readily available port of call for disputes relating to claims without incurring costly legal fees", says Zietsman.

Hospitality Risk Realities for 2010 World Cup & Beyond

While the World Cup brings opportunities to the local hospitality and tourism industries, there are additional and unusual risks that brokers need to convey to their clients so that cover meets world standards.

“It is up to brokers to point out potential additional risks associated with an intense event such as the World Cup where the united passion and excitement of visitors may present unfamiliar types of risks to the hospitality & tourism industries,” says Johan Claassens, marketing manager of VEA Risk Consultants, underwriting managers and hospitality, tourism and wildlife insurance specialists, underwritten by Etana Insurance.

“Our VEA team, with our combined 80 years experience, was at the recent Tourism Indaba held in Durban. Hospitality & tourism professionals came from the entire world and it was the busiest and best South Africa has ever seen. It made us realise that our hospitality clients in South Africa need extra attention regarding this first-of-its-kind event to ensure their cover lives up to the demands that may be made of it. The job of insurance professionals is give businesses an objective view and ensure that nothing is overlooked during June and July and beyond where clean-up, for instance, could be an overlooked cost factor for those in the front line.”


Risk Exposures

Claassens says VEA Risk Consultants has found that a hospitality facility is often too close and familiar with the running of their operation under ‘normal conditions’ to consider the increased risk exposures that comes with an event like World Cup, such as:

(a) Asset Management

Congestions and delays are the least of the challenges facing businesses. Theft, Malicious Damage to Property, Fire Risks, Act of Wild Animals Damage to gardens, water features and ornaments are just some of the potential risks.

Public utilities: Telecommunications, electricity, water, gas, sewerage and waste disposals can affect the day to day operation of businesses and need specific cover.

Infrastructure: Roads, parking areas, bridges, entrance gates, lighting, signage and perimeter fencing, tend to be forgotten when the assets of business are being insured.

Clean-up: The financial implications of clearance and cleaning costs, demolition, debris removal and property protection costs after a destructive event cannot be overlooked.

Seasonal increases on stock: Expenditure on stock (wet and dry) on amenities and increased overall outlay are often overlooked.

(b) Financial Management

Fraud, misuse of credit cards, internet fraud, bilking, loss of profits and revenue.

Additional increased cost of working if an unforeseen event causes you to lower your rack rate to attract tour brokers and operators to regenerate you turnover. There is a further point of concern should the point of focus no longer be there - Loss of tourist attraction. Murder, Suicide, infectious / contagious diseases and wild animal attacks should be a point where extra care and planning is given.

(c) People Management

Using untrained or unskilled temporary staff to accommodate the higher occupancy during this time poses a huge risk for your business.

These include: Front office, kitchen, maintenance and cleaning staff.

The safety of visitors and staff needs to be a priority. Specific risks, be it wild animals, criminal elements, fire and adverse weather conditions or various liability exposures, need special attention and planning from top management down to ground level.

The duty of care is not just a buzz word, but a reality that allows no short cuts.

(d) Risk Management

Proper Risk Management should be the corner stone of any hospitality or tourism entity at any time. During the soccer world cup, a businesses Risk Management plan should be enhanced and in forced to cater for worst case scenarios.

Make sure indemnity forms are updated to meet the world standards.

Have a broad disaster management and rehearsed action plan in force for various risk scenarios.

If you have access to an Emergency Medical Intervention or evacuation assistance call centre, make sure your staff is properly informed on the procedures, emergency contact numbers and the client’s full medical history.

This is not the time to cut back on your Risk Management budget, but rather increase attention to this vital area.

“Medical Intervention and Evacuation backup is an example of essential cover hospitality & tourism professionals need and our VEA Assist 24 Hour Emergency Call Centre was recently involved in the successful evacuation of an elephant attack victim from one of our neighbouring countries. The person concerned is now in a stable condition at Millpark Hospital. The medical emergency could spring from a snake bite or someone falling down a flight of stairs, wooden decks, furniture, probably more easily than an elephant attack.

“If a traveller experiences an unexpected event such as this the host needs to be able to spring into efficient action and that’s what brokers need to convey to their clients so they are protected against all risks. Right now brokers need to redo risk evaluations to be sure.”

Source : FA NEWS

Please contact Bestsure should you need any assistance

Status of AARTO

The main purpose of the AARTO pilot since July 2008 in the municipality of Tshwane and February 2009 in Johannesburg was to, amongst others, test all the various systems, procedures and processes that are utilized in the daily operations, identify weaknesses and deficiencies with the view to develop and apply remedial measures. These related to the weaknesses and loopholes in the legislative framework, the system requirements for efficient interface with various entities and uploading to the National Contraventions Register and the on-line, real-time updating of the National Contraventions Register (NCR), etc. With the NCR being developed as a module of the eNaTIS, it offered the benefits of the interaction of the different modules contained therein for verification, such as the particulars of motor vehicles, driving licenses, operator cards, owners and operators of motor vehicles. Over the past year extensive training on AARTO legislation and the various systems and procedures were undertaken by the Corporation in all the provinces and metropolitan authorities.
In January 2010 a National AARTO Task Team was established with the view of assisting the Corporation, amongst others, to ensure the smooth operations of the pilot; to effect remedial measures to the identified shortcomings; as well as the conducting of a formal assessment of the pilot; to determine the state of readiness of provincial, metropolitan and local issuing authorities, and providing authorities with assistance in this regard; and the finalisation of a national rollout plan. A comprehensive public media campaign and consultative programme is in the process of finalization and will be introduced in due course. Radio and printed advertisements are already utilized in the media.
Early in May 2010 meetings were held with the authorities of the eThekwini, Nelson Mandela Bay and Cape Town in order to discuss the various requirements for the introduction of the AARTO system in their jurisdictions and to determine their state of readiness for such implementation.
The AARTO is in the process of being rolled out in a staggered approach and is expected to be completed by 31 December 2010. The allocation of demerit points to infringers will be introduced on a national basis from 1 April 2011. In view of the FIFA 2010 World Cup consideration is being given to move the date for AARTO implementation in other issuing authorities for later dates.
“AARTO is a law that has been in existence since 1998, after 12 years we all have to be ready to implement it. The Minister is clear on this, it has to be implemented”, said Collins Letsoalo, Acting CEO of RTMC

Source :FANEWS