WILDFIRES: WHAT DOES INSURANCE COVER?

Thursday, January 5, 2017

Since the beginning of January wildfires have ravaged various areas in the Western Cape destroying vegetation, wine farms, historic buildings and residential houses, ultimately costing the Western Cape province millions according to Agriculture MEC, Alan Winde1.  

The insurance industry may be prepared to cover insured clients for the cost of such losses2, but when is fire damage covered and when could fire-related claims be rejected?

“Insurance cover for fire damage will depend on which type of cover you have, be it Car Insurance, Buildings Insurance, Household Insurance or Business Insurance,” says Derek Wilson, Head of online insurance and financial comparison website, Hippo.co.za, “You cannot, for example, claim for fire damage to your furniture if you only have Buildings Insurance.”

Policyholders are generally covered for fire damage to:

  • Vehicles should they have comprehensive Car Insurance or Third Party, Fire and Theft Cover.
  • Buildings should they have Buildings Insurance either through their home loan or bond account provider or estate, or personal Buildings Insurance cover if they own the property.
  • Household items such as furniture, electrical appliances, linen and clothing should they have Household Insurance.
  • Watercrafts such as yachts, motorboats, dinghies, rubber ducks, and jet skis, should they have a Watercraft Policy taken out alongside their Car, Buildings or Household Insurance policy.
  • Business property should they have Business Insurance for any motor or non-motor assets such as vehicles, buildings, and office equipment used for business purposes. Insurers could also cover you for business interruption as a result of fire damage.

Below are some examples of when fire related damage would not necessarily be covered by your Insurer3:

  • Arson — deliberately setting property on fire is a criminal offence and not covered under your insurance policy. Investigators are appointed by insurers to determine whether the fire has been caused by arson.
  • Fire in a vacant home — insurers normally define a vacant home as one that has not been occupied for more than 30 consecutive days. You can, however, obtain an Unoccupied Home Insurance endorsement to your existing policy from certain insurers.

“As policy benefits and exclusions vary depending on the exact type of cover and the specific insurance provider, you should always check your policy documents to ensure you are adequately covered. If you feel that an insurer is not providing you with the right service or cover suited to your needs, shop around for a better deal,” says Wilson.

“We try and assist the public in providing free and easy quotes for insurance and other financial products such as Life Insurance, Funeral Cover, Medical Aid and more from a range of South African providers,” concludes Wilson.



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