In terms of insurance claims relating to the drought and resulting from water restrictions put in place by the authorities in Cape Town and the Western Cape, the impact will largely depend on the type(s) of cover provided. In general, drought, water rationing and the withholding of water by the authorities are not insurable risks or perils and therefore are not covered. The exception to this is Multi-Peril Crop Insurance which insurers extend to farmers in limited amounts. This is normally packaged with hail insurance.

Where clients would typically be covered is in the event of secondary impacts, for example in the case of fire or flood damage.  It should, however, be noted that clients should continue to maintain protective measures against such risks, especially where these are a condition of cover. We therefore recommends that commercial clients ensure that, if applicable to them, they have:

  • Implemented fire detection and/or sprinkler systems updates and upgrades (including booster pumps and water tanks), to ensure cover in the event of fire,
  • Electrical connections/ plumbing are completed and approved by registered professionals,
  • Fire fighting equipment is assessed and tested.

Personal clients need to be aware of the following:

  • That in the event Day Zero arrives; they ensure that all taps are turned off in households. This will prevent potential flooding when municipal water is turned on again,
  • Consult with a pool expert and get advice on whether it is advisable to empty your pool.  The emptying of pools can compromise their structural integrity, causing them to collapse. Should this happen, it probably would not be covered by most insurance companies. The best thing to do is to ensure households use a pool cover to minimise water evaporation.
  • Switch off your geyser. We have consulted with the relevant geyser experts who have advised us that the onset of Day Zero should have no effect on a South African National Standards-compliant geyser.  It is, however, more prudent to switch the geyser off.

Article credit: Santam