More storms mean more insurance claims, but they’re not always paid out – here’s why

With more storms hitting South African communities there are more short-term insurance claims for damage to homes. While it puts your mind at rest to know you are insured, claiming for storm damage and having your claim accepted, is not always that easy.

This is especially clear if you consider the case studies from the latest report of the Ombudsman for Short-term Insurance (OSTI) for 2023. In 2023 the second highest number of complaints, around 25%, related to homeowners’ claims declined on the basis of policy exclusions.

The majority of these claims related to damage caused by acts of nature but were declined on the basis of gradual deterioration, lack of maintenance and wear and tear, followed by defects in design or construction.

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Looking at why these claims were rejected or accepted can teach us how to ensure that our claims are accepted when it comes to our time to claim.

CLAIM REJECTED: Storm damage to boundary wall

The consumer complained after the insurer declined a claim for his collapsed boundary wall that he said collapsed due to extreme winds in April 2023. The insurer rejected his claim on the basis that the damage was caused by gradual deterioration.

The insurer relied on the following provisions of the policy that it covers loss or damage to buildings caused by storm or wind but does not cover loss or damage caused by wear and tear or gradual deterioration. Loss or damage caused by weeds or roots is also not covered.

The boundary wall was constructed as a double skin wall with a single skin wall built on top. It was three metres high and the insurer observed that the wall did not meet the minimum specifications as set out in the National Building Regulations.

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The collapsed boundary wall was not designed to act as a retaining wall but served this purpose. The insurer contended that the wall lacked the necessary columns that were typically required for this type of wall and that its structural integrity had been compromised over time due to the invasive root systems from the surrounding plants.

The insurer said this weakened the wall which led to its eventual collapse. While strong winds may have contributed to the collapse of the wall, it was not the only cause.

After reviewing the evidence submitted by the insurer and the consumer, OSTI believed the proximate cause of the collapse of the wall could not be a single and sudden event. The evidence showed the office that the wind served as the “final straw that broke the camel’s back”.

Therefore, OSTI was of the view that the insurer could substantiate and justify the policy provisions it relied on and upheld the rejection of the claim.

CLAIM REJECTED: Storm damage to property

Another consumer complained that his insurer rejected the claim for storm damage to his property on the basis that the damage fell outside the scope of cover. The insurer said the damage was caused by a combination of extreme weather conditions (storm) and a lack of maintenance.

However, the insurer stated that the primary reason for the rejection of the claim was that the policy excluded cover for resultant damage and damage caused by a lack of maintenance.

The consumer said his area experienced a thunderstorm in December 2022 when about 50mm of rain fell within a short period. He said that water damage occurred to various interior parts of his property, including ceilings and cornices and that the damage was directly caused by the severe storm rather than a lack of maintenance.

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The insurer appointed an assessor to determine the cause and extent of the damage. The assessor found visible and evident stormwater damage to several areas of the property in the bathroom, lounge, kitchen and garage.

The assessor also conducted a roof inspection. The roof consisted of cement tiles with a flat concrete section. The assessor noted that the roof required maintenance and that the waterproofing was insufficient. Various cracks were visible in the waterproofing and some areas were lifting up and peeling.

The assessor also found that several roof tiles had shifted over time leading to blockages in the gutter system. Importantly, the assessor concluded that there was no storm-related damage to the roof and he emphasised that a lack of maintenance was the proximate cause of the damage.

There was indeed a heavy storm that day

In addition, the assessor confirmed that there was indeed a heavy storm that day. The assessor indicated that the damage to the property was the result of a combination of severe weather conditions, specifically the storm and maintenance-related issues, particularly relating to the roof.

The assessor also noted that the lack of maintenance to the roof resulted in stormwater infiltrating the property’s interior due to the deteriorated waterproofing and overflowing gutters. Despite this finding, the assessor concluded that the claim warranted approval.

However, the insurer rejected the claim because the policy excludes damage caused by any process that uses or applies water, wear and tear, gradual deterioration, mould, rust or corrosion, contraction or expansion of soil as a result of its moisture or water content and damage resulting from or aggravated by the lack of maintenance of private residential structures.

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Despite acknowledging that stormwater caused interior damage due to the deteriorating waterproofing and overflowing gutters, the insurer clarified that damage to the walls and ceiling resulting from a lack of roof maintenance would not be covered as the policy also excluded cover for resultant damage.

OSTI agreed with the insurer after reviewing all the evidence and upheld the insurer’s decision to reject the claim as it was made in line with the policy terms and conditions. Although it appeared as if concurrent causes operated to cause the loss, the insurer adequately demonstrated, relying on its assessor’s report, that the unmaintained roof was the proximate cause of the damage and that the policy did not cover resultant damage.

CLAIM PAID OUT: Claim for storm damage and emergency repairs to home

The consumer registered a claim for damage to his house that occurred during the April 2022 KwaZulu-Natal floods. The insurer partially accepted liability for the claim but declined the claim in respect of the reimbursement for emergency repairs that the insured had conducted at his own cost due to the delay by the insurer in assessing the claim.

The insured appointed two informal labourers to assist with cleaning and clearing the excessive mud and debris in the yard and appointed a professional plumber to unblock and repair water pipes that were blocked and damaged by sand and mud caused by the flood.

The insurer relied on the provision for using your own service provider to decline this portion of the claim, that states that the insurer has the right to require that a service provider of its choice do any work required on the insured property.

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The consumer submitted that the insurer’s service provider arrived at his property to assess the damage and to conduct emergency repairs three weeks after the incident and that due to the damage, it was necessary to conduct emergency repairs to the yard as there was excessive mud that was blocking the main door of the house and hindered entry into and exit from the house.

Unblocking the water pipes was also necessary to make the house habitable. The consumer provided the documents and information as evidence to substantiate his claim, as well as photographs depicting the state that the yard was in.

High volume of claims in April 2022

The insurer confirmed that it registered a high volume of claims for the April 2022 floods and as a result, there was a shortage in the number of service providers to timeously attend to assessment of claims. Some areas were also not accessible due to the storm damage.

The insurer rejected the consumer’s report for the costs incurred for clearing the debris and stated that it was insufficient proof as he could not provide a proper invoice or proof of the alleged payments to the informal labourers.

The insurer submitted that the consumer did not provide sufficient evidence to prove that water pipes were blocked or damaged.

After reviewing the evidence submitted by the consumer and the insurer, OSTI agreed that the report by the consumer detailing the costs he incurred for clearing and cleaning the yard was insufficient. However, when the report was considered in conjunction with the photographs he provided, which depicted the state of the yard before and after the labourers cleaned it and showed them working and the report provided by the insurer’s loss adjuster, OSTI found that the consumer provided sufficient evidence to hold the insurer liable for the reimbursement of these costs.

OSTI also considered the invoice for the plumbing costs and the supporting photographs depicting a burst water pipe amongst the debris. The invoice stipulated that the plumber repaired and connected a burst water pipe, while the photographs depicted a burst water pipe with water running through it among the debris in the yard. OSTI found that the insured had also provided sufficient evidence in this regard.

Therefore, OSTI recommended that the consumer’s claim for reimbursement of the costs that he incurred be settled according to the rates of the insurer’s service providers. The insurer agreed to abide by the recommendation.