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IOL News
2 days ago
- Business
- IOL News
How crime and climate risks are driving regular property insurance reviews and price assessments
Property renovations may go a long way in boosting one's property cover assessments. Image: Pexels The constant evolution of crime and climate risks is making property insurers regularly review and adapt how they assess and price cover. While keeping one's property safe used to be as simple as locking the doors and setting an alarm, the shifting weather patterns and evolving crime trends are changing how South African insurers assess risk, says Ryno de Kock, head of distribution at PSG Insure. To stay protected, he said, homeowners and businesses need insurance that keeps pace with these growing threats. Recent crime statistics show that residential burglary remains the most prevalent property-related crime across the country, making up 44% of all property crimes. To remain insurable and to reduce the risk of claim repudiation, home and business owners must keep their security features well-maintained and fully operational. 'This includes checking that alarm systems are functional and linked to armed response and back-up power where required, ensuring all locks, gates and burglar bars are in place, and updating insurers if any structural changes impact access points or visibility,' says De Kock. Additional risk-mitigation measures, such as CCTV, electric fencing and motion-sensor lighting, may also reduce premiums or improve underwriting outcomes in high-crime areas. While crime is a persistent issue, extreme weather has emerged as an equally serious concern in recent years. De Kock says that the tragic June 2025 floods in Mthatha, where over 100 people lost their lives and entire neighbourhoods were submerged, serve as a stark reminder that climate-related risks are escalating. Once considered seasonal anomalies, these extreme weather events are becoming regular occurrences, with costly consequences for the insured. Over the past decade, local insurers have seen significant increases in claims related to: Flash floods and blocked drainage systems. Lightning damage during storms. High-wind destruction of roofs and walls. Fire outbreaks in urban-wildland areas (such as suburbs around Table Mountain). To better understand risk exposure, the insurer said some insurers have adopted a method called geocoding. This uses GPS-based data, historic claims information and predictive modelling to assess how risky a location is for certain losses. 'Geocoding allows insurers to evaluate not just where past claims have occurred, but also where future risks may emerge. For example, areas not traditionally prone to flooding may now be flagged as high risk due to shifting rainfall patterns and inadequate drainage,' he says. Similarly, properties bordering fire-prone vegetation may carry higher premiums or be excluded altogether from certain types of cover. This means one's quote could be affected by where their property is situated, even if they have never made a claim before. If their area is identified as high-risk, insurers may apply additional conditions, increase excesses, or, in some cases, decline the request for cover altogether. PSG Insure said with the colder months set to continue for a little while longer, homeowners should perform the recommended winter maintenance tasks to prevent avoidable claims and keep their policy valid. This includes: Clearing gutters and drains to avoid water build-up and flooding. Servicing heating equipment to reduce fire risk. Checking that your roof is in good repair and free of loose tiles or leaks. Finally, De Kock emphasised the importance of notifying one's insurer of any major changes or renovations, particularly if these affect the structure, use or risk profile of the property. Earlier this month, the National Treasury released two documents on enhancing South Africa's approach to Disaster Risk Insurance by better using private sector participation. Those were the Disaster Risk Strategy and a survey of municipalities' experience of managing disaster risk South Africa is said to have the largest and most mature insurance market of all middle-income countries. While property insurance is widely available, and while the most comprehensive policies cover natural disaster risk (including earthquake, strong wind, flood, hailstorm, landslide, and subsidence), policies are tailored to and bought by middle-and upper-income households. This is indicative of trends for other insurance products, including agriculture insurance, which is currently available only to commercial farmers. Most public infrastructure is uninsured, placing a large contingent liability on the government, National Treasury said.
IOL News
15-07-2025
- Business
- IOL News
Exploring the rise of rental properties and business conversions in South Africa's booming rental market
The apartment market is booming in South Africa. Image: Pexels South Africa's residential rental market boom brought a rise in properties being rented, let or changed into businesses, such as Airbnb listings or B&Bs. The national rental growth reached 5.6% in the first quarter of 2025 - the strongest quarterly increase in nearly eight years-according to the PayProp Rental Index. But what many landlords, tenants, B&B owners or Airbnb hosts do not realise is how the level of furnishing in a property can significantly influence insurance needs, says Ryno de Kock, head of distribution at PSG Insure. He said unfurnished rentals typically exclude movable items like furniture and appliances, leaving tenants to bring in their own. 'For landlords, this means securing building insurance that covers structural risks like plumbing blowouts, fire damage or storm-related incidents. A public liability extension is also essential to protect against third-party claims, like if a tenant or visitor gets injured due to negligence on the premises, De Koch said. Property owners' liability is also essential to protect against third-party claims, he said. "If the tenant or visitor's property gets damaged due to an event which is related to the building, for example-if a landlord does not maintain the property appropriately, and a roof tile is blown off by the wind and damages a vehicle, the property owner must have the necessary liability cover in place to cater for these damages,' De Kock added For tenants, the head said a major misconception is that the landlord's policy will cover their possessions. 'It won't. This means renters need their own contents insurance to protect items like electronics and kitchen appliances. For example, if a geyser bursts and damages your TV, you can only claim if you're properly insured. The landlord's policy will likely only cover structural damage.' Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading The insurance company said semi-furnished homes may include essentials such as a fridge, washing machine, or a dining room set. In these cases, it said landlords either take out contents insurance in addition to the standard building cover or include the contents as part of the rental agreement. It added that a comprehensive inventory list is crucial for these items, and each item should be documented with its replacement value. The company said most property owners will include these items as part of the rental agreement, where each item should be documented with its replacement value. 'This will normally shift the responsibility of insuring these items onto the tenant, who can be held liable for these items when the rental agreement ends.' Meanwhile, tenants were said to remain responsible for covering their own belongings. So, if they bring in a high-end speaker system or personal electronics, they must be sure to specify them in their policy and consider adding these items to 'all-risk' cover if the property is left with them. With regards to fully furnished properties, whether rented long-term or listed on Airbnb, these carry the greatest exposure for landlords. Here, De Kock advised that a comprehensive content policy is non-negotiable. 'From bed linen to TVs, everything should be insured at current replacement value. If you're hosting on Airbnb, make sure your policy covers multiple addresses if you have multiple risks. This will include your home and the rental property, if applicable,' he said. He added that it is also important to keep an updated inventory of all contents that are included in the insurance policy, with the replacement value per item. PSG Insure said short-term lets also introduce a higher chance of theft and accidental damage. As such, he said Airbnb hosts often face exclusions for theft without forced entry or damage caused by guests. Additionally, according to standard Airbnb insurance rules, cover may only apply if one resides permanently on the property and limits guest numbers to under six adults. The head said even when the property is fully furnished, tenants should still cover any valuables they bring in. He said a tenant's computer, camera, or designer coffee machine will not be included in the landlord's policy and may require separate listing under contents or all-risk cover. De Koch said it is also important to understand that a standard domestic insurance policy typically will not cover liability arising from paying guests. He said if one is listing their property on Airbnb or operating a guesthouse, they will need commercial liability insurance specifically designed to cover short-term or hospitality-related stays. He also suggested that this becomes especially critical when hosting international guests, who may claim damages in foreign currency. 'If you're renting out the property as an Airbnb, it's crucial that the property owner provides the necessary disclaimer to guests that the B&B or Airbnb cannot take responsibility for their items, and the guest should take extra precautions when leaving them unattended.' If meals are provided as part of a guest's stay, product liability cover is essential to protect the owner against risks such as food poisoning. Furthermore, liability insurance can extend to cover the actions of staff or employees, for example, if a waiter trips on a rug and spills hot coffee on a guest, the owner could be held legally liable. These scenarios may seem rare, but without the appropriate cover, they could result in financially devastating legal and medical claims. De Kock concluded: 'With the right policies and expert advice, property rentals – furnished or not – can be an extremely lucrative venture in today's market. The key, however, is understanding the specific risks you face and tailoring your cover accordingly. "An experienced adviser can help you navigate exclusions, avoid underinsurance, and ensure that your policy truly fits your property setup. According to the Landlords Association of South Africa (LASA), a commercial lease is a legally binding contract between a landlord and a tenant for the rental of property used for business purposes. Unlike residential leases, LASA said commercial leases are often highly negotiable and tailored to the specific needs of both parties. 'For landlords and tenants alike, carefully structuring the agreement is essential to protect financial interests, minimise legal risk, and provide clarity throughout the entire lease term.' LASA said that when structuring a commercial lease agreement to protect one's interests, they must consider addressing key elements in detail. 'A well-crafted lease reduces misunderstandings, clearly outlines rights and obligations, and provides legal remedies in the event of any problems that may arise.'
IOL News
25-04-2025
- Business
- IOL News
Is your insurance cover adequate in a volatile rand environment?
Times are tough, geopolitical tensions are high in global markets, and South Africa is not immune. Continued pressure on- and depreciation of the rand – largely due to factors outside of our control – fuel fears and add financial strain to a struggling economy, which already needs to deal with successive VAT increases over the next two years. These developments have an impact on all business sectors, including the insurance industry. This is according to Ryno de Kock, head of distribution at PSG Insure, who unpacks how rand volatility and depreciation could be impacting your insurance cover, both from a business and personal insurance cover perspective. A weaker rand means imported goods cost more Most consumer goods in South Africa – including cars, electronic devices, and household appliances – are imported. 'A weaker rand means that all these items cost more – which in turn means that their replacement values increase. Insurance companies are likely to experience higher claim values as the rand depreciates and may in time have to increase insurance premiums to cover these,' says de Kock. Don't skimp on adequate cover While this is not good news for households and businesses already under pressure, it is crucial not to cut corners on financial protection. 'Global development aside, your home or business still has the same risks they did before. But the consequences of a loss that is inadequately covered by your policy will be more severe now. As the replacement costs of goods increase, it becomes more difficult – and in many cases impossible – to cover shortfalls out of your own pocket,' he says. Therefore, it is important to bear the impact of the depreciating rand in mind when reviewing your premiums and evaluating whether your cover is sufficient. Review your situation Have a look around your house, or your business. How many items are imported, and what will it cost to replace these if they must be replaced with a weaker rand? First on your list at home is probably your flat-screen TV, followed by your laptop and cell phone – but if you look more carefully, you'll find that almost every item would be more expensive to replace due to the weaker rand. 'At your business, the most obviously affected items will be trading stock, electronics and specialised machinery. The increasing cost of imported stock as the currency rapidly declines can be catastrophic for your business if you don't have contingency plans in place.' Calculate your costs Let's consider how a 10% decrease in the rand affects your insurance. Perhaps the estimated value of the home electronics included in your home contents insurance is around R200 000 but would now cost R220 000 to replace. Additionally, the increased cost of importing vehicle parts is another consideration. As de Kock suggests, 'The best way to protect yourself – or your business – is with a carefully thought through insurance plan that covers you at the full, present-day replacement cost of any items that may be lost or damaged.' Stay covered Most of us don't monitor the exchange rate daily, and it's only one of the many factors that could impact the adequacy of the insurance cover we have in place. This is where the expertise of a qualified short-term insurance adviser is invaluable. If you are unsure about your current level of cover or the replacement values accounted for in your policy, speak to your adviser and give yourself that additional peace of mind. 'Remember that you don't need to wait for your annual policy review to update your insured value and can do so more regularly – such as every six months or whenever you acquire something new that would increase the cover you need,' de Kock says. PERSONAL FINANCE
