NOMPU SIZIBA: The Table Mountain fire has caused untold destruction, with key landmarks damaged in its wake, including the University of Cape Town’s library, the Rhodes Memorial and private homes, among other things. This unexpected event is yet another reminder of how important it is to ensure that you have insurance cover for the unexpected.
To discuss this further, I’m joined on the line by Christelle Colman. She’s a spokesperson at Old Mutual Insure. Thanks very much for joining us, Christelle. Do we have an idea around the kind of impact and likely cost of the damage that has been caused by the Cape Town fire?
CHRISTELLE COLMAN: Good evening, Nompu. We don’t. It’s really still too early. We often find with these big catastrophic events that we are notified of the claims only after people have come back after being evacuated. The damage isn’t related just to fire; it’s smoke and soot damage, water damage if they tried to hose a small fire down.
People talk about the university, though. I think it’s interesting to mention to your listeners that most of the big South African universities form part of a specific risk and insurance fund for the tertiary education institutions. Most of the insurance markets actually share in that risk. So almost all insurance companies will be affected in some way by this fire.
I also heard from an insider in the industry, whom I can’t mention, that it’s estimated that the loss could be as big as R1 billion. So it’s a very, very large loss to the industry, not just from a financial perspective, but of course there are some items in that building that can’t be replaced, even if you put a monetary value to them.
NOMPU SIZIBA: That’s what I was going to ask. Some of the works – that will be the books written in the, I don’t know, 15th or 16th century or whatever – how do you put a value on those? At the end of the day, unless they were transcribed electronically or whatever it may be, there’s no way you can get them back or replicated.
CHRISTELLE COLMAN: Absolutely. It’s obviously the book collections …plans, original plans of some of the oldest buildings in South Africa, and apparently a very extensive art collection, I’m told.
This is the question we also have to answer with all of these very unique and rare collections, whether private or a public collections. You can always put a monetary value to them. Typically we would say, if that collection were available on an auction platform to be sold, how much would it fetch? Then we would put a monetary value to it.
But, as we stand today, we are also saddened because many items have possibly gone forever and you can’t replace them. I think that’s the real issue.
NOMPU SIZIBA: No, you can’t. So with this lesson of a totally unexpected event wreaking the kind of havoc that it has, what’s the best way to adequately protect precious heirlooms, collections and objects such as books, family photos, jewellery, and so on?
CHRISTELLE COLMAN: Nompu, I don’t believe that it was completely unexpected because we live in Cape Town and we’ve got numerous wildfires – not just in the Western Cape but all around the coastal region. I think that’s the call to action to make, as we hear that the fire seems to be under control.
We get phone calls. I remember going back to 2000, so many faxes, people saying to us the fire is approaching and we want to insure our house, we want to increase our sum insured on the buildings. Just coincidently, in the Knysna fires the single biggest issue that we had post the fire was severe underinsurance, and some people had no insurance on their property.
So as we are here today, after this massive event, make sure that you use this opportunity to go and review your policy document, and make sure that you’ve got the correct insurance replacement value.
Remember, we don’t insure for market value when it comes to property. How much does it cost to rebuild the building? How much does it cost to buy the new items? Go and make that review of your policy document and make sure that you are adequately insured. Don’t try and skimp on insurance premiums on buildings, because it’s relatively cheap insurance compared to motor insurance. Make sure you’re adequately insured, and increase your excess if you can’t afford the full insurance premium, rather than take a reduced sum insured, because after loss you are severely out of pocket on the single biggest asset that you will acquire during your lifetime – which is often your private home.
NOMPU SIZIBA: One of the issues coming up out of this is that when people saw the fire coming, they just froze and didn’t know where to head for safety. What sort of insurance is available for people who find themselves in mortal danger – where can they get immediate assistance?
CHRISTELLE COLMAN: Well, most insurance companies and certainly Old Mutual Insure have emergency-assist lines and mobile applications. I know people just ignore this when they get their policy documents. But if you are someone who likes to go for walks on the mountain, if you live in Cape Town make sure that you’ve got those emergency numbers and the applications loaded onto your phone. If you go for a walk on the mountain, make sure your battery is charged, so you can get help if you get stuck.
But a very important point when we talk about insurance and these catastrophic events is when you have insurance in place, don’t kind of save things. Rather make sure that your family’s lives, and your pets are looked after and get out of the face of danger. Don’t try running around to try and use your hosepipe to prevent the fire. People do silly things like that. I don’t understand it. They get into serious trouble.
Fortunately, we had only two incidents of firefighters being injured in this fire, but in previous years we’ve had people getting seriously injured and some losing their lives in the process. So don’t try to save things.
Again, use this opportunity to keep digital copies of you identity document saved in the cloud. Put the items you can’t replace, your grandmother’s earrings, or artworks or whatever, in a safety deposit box at the bank, because they are quite safe at the bank. Make sure that you separate your risk in that way if you live in a fire-prone area, so that you can just take your keys, take your dogs, cats and children and just leave – and know the insurance policy will pay out.
NOMPU SIZIBA: Just on a practical note, where you try to anticipate the unexpected – but like you say one can expect some of these things – what measures can one take before leaving the house to make sure that your home and your possessions are protected as far as possible?
CHRISTELLE COLMAN: Most people get to go back to the properties. The CBD was evacuated from this morning, and I’m hearing some people are starting to go back. When you are in that frantic head space, still set your alarms, still lock up. We live in a country with high crime and people who will take advantage of this opportunity to perhaps commit additional crimes. So always make sure that, if you know a fire is approaching, you close your windows, lock your doors and leave the house so that you can come back to it. And then, at that point start looking what the damages are from a soot and smoke perspective, and inform your insurance company as soon as possible if you have suffered some of those damages.
I think something else that’s very important is for you to trust [your insurer], which you should. I know people believe insurance companies don’t pay claims, but billions and billions of rands are paid out each year, and more than 99% of all claims submitted are paid out.
Make sure that you’ve got a good insurance policy in place, and read your [policy] document and understand what is expected of you in a case like this. I can’t speak for every insurance company. But again, if you live in a high-risk environment, make sure that you understand what is expected of you so that you can have peace of mind when something goes wrong. You can leave and everything will be covered and paid out.
NOMPU SIZIBA: Indeed. Christelle, thank you very much for your time, as always. Christelle Colman is a spokesperson at Old Mutual Insure.