Unrest insurance: 'Sasria won't pay if argument wins that it's pure looting'
South Africans watched in horror as further scenes of looting and vandalism took place in parts of KwaZulu-Natal and Gauteng on Tuesday.
While big businesses would have insurance cover, some of the marginal outfits destroyed in the violence would have belonged to people who did not have insurance, comments Bruce Whitfield.
He talks to Ryan Woolley, CEO of consulting firm Insurance Claims Africa (ICA).
According to the claims that have come in says Woolley, he'd estimate the cost of the damage at about R10 billion so far.
State-owned Sasria is the only insurer in South Africa that provides cover against risks such as civil unrest.
This cover is provided in most commercial insurance policies.
In general, there is cover. There are commercial policies that clients would have taken for their property, buildings, content, stock and business interruption.Ryan Woolley, CEO - Insurance Claims Africa
Off the back of that, if this is deemed a political riot, strike or public disorder then essentially the government insurer Sasria will step in.Ryan Woolley, CEO - Insurance Claims Africa
Most policies have Sasria added to them, which means that it is a risk that is covered in South Africa.Ryan Woolley, CEO - Insurance Claims Africa
Who decides whether a business client's claim relating to the current riots falls into the correct risk category for a Sasria payout?
It's the lawyers [who decide], like the ones we've been fighting in the Covid claims - those are the lawyers we're going to be dealing with once again.Ryan Woolley, CEO - Insurance Claims Africa
They are the guys who're going to be seeing whether the commercial insurer needs to pay or whether they're going to advice Sasria to pay.Ryan Woolley, CEO - Insurance Claims Africa
That's when it gets difficult. Sasria won't pay if it's pure looting, just theft and criminal. That's the angle they will probably take and the commercial insurer will obviously push the riot/strike/public disorder route.Ryan Woolley, CEO - Insurance Claims Africa
Whichever way it goes, Woolley notes, the volume of claims (including Covid claims) will slow down the payout process.
Listen to the explanation on The Money Show:
Source : Boikhutso Ntsoko/Eyewitness News