George Fires 2018: The insurance impact

The recent George fires which started on the 28th of October 2018 and were finally quenched by good rains on Monday the 5th of November 2018, once again highlighted the need for adequate property insurance.

Whilst there was relatively little property damage to George residential areas, the unfavourable weather conditions with extremely high temperatures and gale force winds caused the fire to sweep through the Sedgefield /Farleigh rural community at an astonishing speed and with devastating results. Not only were several structures razed to the ground in the blink of an eye, but eight people lost their lives when they were unable to escape the blaze. They were tragically trapped in their home where they succumbed to smoke and fire.

The loss of lives can never be replaced, but property can. Are you adequately insured against something like this? Thanks to the excellent firefighting efforts of a well-co-ordinated team of professionals the George residents were lucky this time, but it could so easily have been different. It makes no difference to a natural phenomenon such as this devastating fire whether one stays in prestigious residential suburbs or modest start-up housing. Had the fire gained a foothold in the leafy suburbs of George there is no telling where it may have ended.

Property insurance is something that can easily be neglected. It’s one of those things which the bank requires to finance your house – and one of the first expenses to be cut when times are tough. “And why not?” you may ask yourself. After all, the risks are low. “It won’t happen to me. I am as safe as houses here. I will look after myself. I am well prepared”. These are all reasons why we feel we can do without property insurance. But think again. If a team of highly qualified and experienced professionals battle for days to contain such a fire utilising spotter planes, helicopters, water bombs, trucks and firefighters on the ground, what chance do you have?

Your home is probably the largest single expense you will ever incur in your life. The building may be bought, built or renovated, old or new, contemporary, modern or avant-garde, but we will make it a “home” by putting our own unique stamp on it. What will you do if it is destroyed or damaged by fire? Even if not totally destroyed, firefighting efforts often result in water damage to other areas of the building. Most often these damages cannot be fixed with a bit of putty and a lick of paint or new carpets and drapes. What previously could have been renovated may now be structurally compromised and may have to be rebuilt.

When last did you have a look at building costs? Ten years ago, the average building cost per square metre was just below R2000. It is now fast approaching R8000 per square metre for a moderate house. Has your income kept pace with this kind of escalation? Probably not? Even if you had managed to build your own house with your savings ten years ago, the chances are slim that you will be able to repeat that exercise now. It is even worse if you have a bond over the property. Not only will you still be liable to the bank for bond repayments, but you may no longer have a home to stay in and could probably ill afford to service bond repayments as well as the costs of alternative accommodation.

Another major topic of concern when a house is destroyed in a fire – the cost of rebuilding is only part of the actual loss. There may well be other losses such as the costs of alternative accommodation, prevention or preservation, cleaning up, replacing the contents and even loss of income. All of these can be adequately dealt with in a proper policy of property insurance. Not only will an insurer most often provide cover for all of the above but re-building costs will be at today’s prices and not the price that the house was built for 10, 20 or 30 years ago. That means you can restore your dignity, your sense of belonging and ultimately your “home”.

Don’t be without property insurance. The risk may be small, but the consequences may be disastrous.

Written by:
Gerhard Sonnekus
Managing Executive: Client Services
Oakhurst Insurance Company Limited

Category: News