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Rain, hail claims could be up to R1bn

Oct 28 2012 14:44 Adri van Zyl

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Johannesburg – Short-term insurers estimate the total damage caused by floods in the Eastern Cape and a hail storm on the East Rand to be between R500m and R1bn.

Claims are streaming in, particularly in respect of hail damage to vehicles in Edenvale, Germiston, Kempton Park and Midrand, which were worst hit by the storm which lasted less than two minutes.

The respective short-term insurers have received claims for damage to between 1 000 and 6 000 vehicles. 

OUTsurance chief executive Willem Roos says insurers usually hardly receive 1 000 claims a year for hail damage.

Some insurers have not received all the claims yet and the number of vehicles for which they will have to fork out will rise.

The two biggest, Santam and Mutual & Federal, were the only ones to receive significant claims for damage caused by the floods in the Eastern Cape.

Bradley du Chenne, a senior director at Dial Direct, says the hail storm on the East Rand was one of the most devastating that insurers have ever had to deal with.

Santam compares the extent of the hail damage to that of the one that hit Pretoria in the early 1980s. At that time Santam repaired about 4 000 cars at a cost of about R15m. The current number is 2 000 at a cost of R28m.

For the insurers, “great drama” is involved in handling the claims and having the repairs done.

Last week most of them put measures in place for faster processing of claims.

Some extended their working hours to handle the claims, while others set up temporary centres for assessing damage and appointed additional panel beaters so that the work could be completed more quickly.

On Friday Santam announced that it had brought in 25 foreign experts who were trained in a special technique to repair hail damage in order to assist with the repairs. 

Fanus Coetzee, head of claims adjustment services at Santam, says the first of the experts from Brazil, The Netherlands, the US, England and Slovenia have arrived in the country.

These experts are trained in a special technique for pressing out dents caused by hail – which is cheaper than replacing panels. Coetzee says 60% of the vehicles can be repaired using this paint-less method.

He says the reason why the experts are coming from overseas is because South Africa has only 20 to 25 people trained in this technique.

Santam has rented an empty shed on the East Rand which will become a hive of activity from Monday, says Coetzee.

On Friday the respective insurers received claims worth millions of rands for hail damage to thousands of cars.

Santam: Up to Friday claims for damage to 1 000 vehicles had been submitted and the total cost of repairs is estimated at R28m. The company received 400 claims for damage resulting from the floods in the Eastern Cape, which damage is expected to cost R35m.

Mutual & Federal: So far 1 244 claims have been received for damage to homes and vehicles on the East Rand which is expected to cost R24.4m, and 211 claims resulting from floods in the Eastern Cape amounting to an estimated R15.2m.

OUTsurance: About 6 000 claims have been received for damage to vehicles. The estimated value of the claims for damage to houses, garden furniture and vehicles is between R90m and R100m.

Dial Direct: Up to 3 300 claims were received within 12 hours after the storm.

iWYZE and MiWay: Average claims for vehicle damage received are respectively R15 000 and R20 000.
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