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Hailstorms, car insurance and SMS warnings

Are you still covered if you ignore an insurer’s notification?

JOHANNESBURG – Beep beep. Beep beep.

YOUR INSURANCE COMPANY advises you to move your vehicle undercover, as a storm with a risk of hail is imminent in Johannesburg (CBD).

You may have been receiving these types of SMSes of late, following severe hailstorms in Gauteng in the past, that damaged thousands of vehicles and caused claims running into millions of rands.

In recent times, insurers generally have also embraced social media platforms such as Twitter as a means to inform clients of pending weather risks and to reduce their own exposure.

But where do these warnings leave clients who are unable to move their vehicles to safety, or who ignore the warning?

Insurance companies approached for comment are in agreement that failure to respond to SMS warnings won’t result in a refusal to pay a claim as a result of hail damage.

Donald Kau, head of corporate affairs at Santam, says the information provided is not a tool to repudiate any claim.

“We provide general insurance related tips to policyholders all the time. This is no different.”

Kau explains that the insurance policy is the binding contract between Santam and the policyholder and that they do not introduce features outside of the policy in order to find excuses not to pay claims.

Heidi Dias, head of claims at Mutual & Federal, says the weather alert service is a preventative measure.

“Our customers will not be penalised if they chose to ignore the SMS,” Dias says.

Anton Ossip, chief executive officer of Discovery Insure, agrees.

He says Discovery Insure sends out SMSes as an additional free service to help clients take action to prevent their cars being damaged.

“We are just providing them with good advice, and will never use these SMSes against a client.”

If an insurance client does not have access to undercover parking, all is not lost.

Kau says Santam has provided simple-to-implement tips such as advising clients to use a blanket to cover their vehicle ahead of an approaching storm.

He says such a basic action makes a massive difference to the impact of hailstones on the body of a vehicle.

Hailstorms

Within a few days after the hailstorm that hit Gauteng at the end of November, Santam had received more than 2 000 claims with an estimated value of R60m, although these numbers were subject to change.

Mutual & Federal received in excess of 1 000 claims while Discovery Insure received over 250 hailstorm-related claims.

Dias estimated that the impact would be very similar to that experienced during 2012.

Asked whether they expect a continuing trend of claims increases as a result of hail damage, Dias said: “Yes, over the last two years we have seen an increase in the number and magnitude of weather-related claims, both in South Africa and across the world.”

Kau says there has been an increased severity of hailstorms, but this period (November to February) is also normal for hailstorms occurring in Gauteng.

“It should be noted that the increasing volume of cars on the roads also contributes to the volume of claims received,” Kau says.

Ossip says during 2012 and 2013, Gauteng experienced severe hailstorms that were of a catastrophic nature, and which by definition, are not expected to occur every year.

“We do not expect these events to occur with such a level of frequency in future.”

The impact of warnings

Kau says Santam has noted through social media that policyholders are noting the warnings and are happy to receive them.

“It is too soon to report any significant trends within the claims or to attribute this to the warnings.”

Moreover, the impact of SMS alerts or other notifications is difficult to determine, since every hailstorm will differ and a reduction in claims may be related to, amongst other things, a less severe hailstorm.

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