Natural disaster warning for South African homeowners

Insurance experts warned South Africans of the rising risk of natural disasters to property, which is already seen in the increasing occurrence of extreme weather.

This warning comes after a state of disaster was declared in KwaZulu-Natal due to severe rains, flooding, and a reported tornado that swept through Montana in northern Pretoria in late February and March.

A state of disaster was officially declared in KwaZulu-Natal following weather events hitting the province in the latter half of February.

This resulted in R3.1 billion in damages. Rainfall, floods and powerful winds destroyed infrastructure like electricity and water and led to the deaths of 22 people.

The tornado in Pretoria caused widespread damage to cars, buildings, the contents of these buildings, and external geysers.

Trees were uprooted, roofs were blown away, areas and roads were flooded, and many residents had to be evacuated.

The SA Weather Service later categorised this extreme weather event as a ‘landspout’. It was the second such incident within a year.

According to the weather service, a landspout develops over land and is generally smaller and weaker than a tornado. However, it still causes severe damage.

In 2024, natural disasters worldwide caused losses estimated at $320 billion. Of these, only around half were insured.

Locally, the latest data from the South African Risk and Vulnerability Atlas shows that South Africa has reported 111 severe national disasters over the last 40 years, most of which were floods and storms.

Additionally, data from the Outlier showed that over the past 12 years, the government has declared 35 national states of disaster.

Six of these declarations were made since the pandemic in 2020 for reasons such as drought, floods, and fires—including the major floods that hit KwaZulu-Natal in 2022.

The unprecedented rainfall and subsequent flooding in the province caused the deaths of more than 400 people, while economic losses were estimated at R17 billion.

Warning for South African homeowners

Insurance firms and banks have highlighted that extreme weather events and the heightened risk of property damage are rising in South Africa, and homeowners are already taking note.

Munich Re, one of the world’s largest reinsurers and one of King Price’s reinsurers, polled homeowners about whether they’ve considered expanding their insurance.

In response to increasing weather disaster risks, 57% indicated they want to do so, but cost is a factor.

Additionally, Absa’s latest Homeowner Sentiment Index (HSI), polling over 1,200 South Africans, revealed similar concerns.

The bank noted that 89% of homeowners viewed extreme weather conditions as a significant concern and are investigating whether their property is adequately covered.

Wynand van Vuuren, client experience partner at King Price Insurance, says that the country’s most common natural disasters, including floods, droughts, fires, and large storms, are on the rise.

He added that lightning strikes, hail damage, wind storms, and sea-level rises occur more often in South Africa than before.

Van Vuuren stressed that consumers who do not insure their cars, buildings, and home contents are becoming increasingly vulnerable.

“The cost of fixing the damage caused by natural disasters is increasing every year, and South Africans who do not have adequate insurance have to pay these costs out of their own pockets,” he said.

“Having to fix damage caused by a natural disaster can be a devastating blow to your finances. Only 30% to 40% of cars on South African roads are insured.”

He also highlighted that when it comes to their buildings and home contents, most South Africans focus on a cover for robbery and break-ins.

South Africans don’t pay enough attention to protecting their homes and possessions against the effects of natural disasters.

Van Vuuren said that this results in many homeowners being under-insured and often only realising this when it’s time to claim.

He explained that under-insurance occurs when your buildings and home contents are covered for less than their replacement value at today’s prices.

In such cases, valid claims are paid out proportionately. For example, if the value of your building is R400,000 and you only insure it for R200,000, then you’ll likely only be compensated for 50% of your loss.

Many consumers also doubt insurers’ ability to pay massive claims caused by natural catastrophes, which can run into hundreds of millions of rands.

“There’s no need for concern when it comes to paying claims. In South Africa, the industry regulator requires all insurers to maintain adequate surplus funds for potential claims,” he said.

“If you lose your house, you’ve dotted the Is and crossed the Ts on your insurance policy, and your claim is valid, you’ll be paid out.”

Damage by natural disasters in South Africa