How Day Zero will impact insurance cover
The Cape Town drought has started having a substantial impact on the lives of Capetonians, with water saving measures being implemented and people stockpiling water to such a degree that the retailers can’t stay ahead with supply. Day Zero is now set to arrive on 4 June 2018, the day the City will turn off the taps.
The City of Cape Town has implemented a number of water restriction levels in an attempt to drastically cut down residents’ water use, but to date water rationing through advance pressure management and supply limitations have not managed to reverse Day Zero’s impending date. In fact, it was brought forward due to warm conditions and continuously high water usage.
The question is how will Day Zero affect your insurance cover and what factors should you be aware of in terms of risk mitigation and keep your belongings covered and your assets protected.
As drought, water rationing and related incidences are not insurable perils, these events are not covered by insurance. Some agricultural insurance policies may provide some cover but not without limits and conditions.
When there is no water supply, all water-dependent firefighting equipment will obviously not be operational. This means that a sprinkler system connected to the municipal water supply – for example – in a residential or commercial building will not work when the taps run dry.
The number of fire hydrants currently installed in a building may not be sufficient to fight a fire until the local fire brigade arrives, without the back up of the sprinkler system. Sometimes – mostly due to a lack of maintenance – fire hydrants are not in working order. Depending on the severity of the fire, a lot of damage can be done in the time it takes the local fire brigade to arrive. The insured must be aware that they are responsible for servicing and maintaining their firefighting equipment according to their policy contract. Some insurers advise installing additional hand-held fire extinguishers to replace of hose reels when there is no water.
Keeping fire cover in place
Generally, when there is a drought that results in water rationing, water being cut off or a reduction in water pressure, fire cover remains in place. This, however, does not apply to situations where water supply has been cut off due to non-payment of a water bill, which is deemed as negligent on the part of the insured.
Keep in mind that owners are responsible for maintaining sprinkler systems in good working condition. If the system is found to have been faulty during a fire due to a lack of maintenance, any claims to recover fire loss or damage will be rejected. It is therefore necessary to keep some sort of proof of the most recent service conducted.
The key factor in keeping insurance cover in place for geysers is to maintain your geyser. This will ensure that cover remains in place as per individual insurance policies for insured events. Some insurers advise switching off your geyser when there is no municipal water supply and when your geyser is not being used.
Insurers require their policyholders to take responsibility for observing the terms and conditions of their insurance policy, and to take all reasonable precautions to prevent loss or damage. To remain proactive in protecting your assets and belongings in times of drought and water scarcity, it is prudent to take additional precautions to be prepared for any fire-related loss. This means that all potential threats must be addressed and mitigated, this includes cutting back bushes, trimming trees around the building and avoid storing any combustible materials near building structures.
Talk to your Garrun broker if you have any further questions about your insurance cover.