Johannesburg - At least five insurers will not pay for damages to houses caused by the earthquake that hit the country if it has mining links, according to a study by Justmoney released on Wednesday.
"We approached some of the major building insurance providers in SA and found that five out of 17 providers could reject claims relating to the Orkney incident if it was found to be linked to mining activities," Justmoney editor Angelique Ruzicka said.
The five are three of the four major banks - Standard Bank, Absa and Nedbank - and two specialist insurers, MUA and Addsure.
"Nedbank provides cover for mining-related damage but not if earthquakes result from acid mine drainage (AMD)," she said.
"Specialist insurer MUA Insurance Acceptances offers standard earthquake cover, but if it's mining-related it won't uphold the claim," she said.
Ruzicka said Standard Bank’s policy stated that "you must prove that the damage was not caused by mining operations; and you must pay the first R2 500 or 1% of the loss or damage (whichever is higher) if it was caused by mining operations."
An Absa spokesperson disputed the survey saying that Absa's Home Owners Policy does in fact cover damage caused by mining-related earth tremors.
"We received approximately 1 100 claims linked to the event on 5 August and are in the process of finalising these as and when the estimations reports come through. We are fully committed to ensuring that our customers affected by the tremors are settled in the quickest possible time."
Justmoney, which is a website offering financial advice to consumers, responded saying that they stand by the research.
Other companies surveyed included Telesure, Santam, and Hollard.
Read: At least 400 houses damaged in SA quake
A 5.5 magnitude earthquake struck the North West province on August 5, with the epicentre the mining town of Orkney. A 31-year-old man was killed and at least 34 miners were injured and more than 600 houses damaged.
According to the water and sanitation department, AMD is generated when sulphide-bearing minerals, often in the form of pyrite (found in reefs mined for gold), are exposed to oxygen and water.
This process, termed pyrite oxidation, is characterised by the generation of sulphuric acid and dissolved iron.
Mandy Barrett of Aon SA pointed out that many South Africans were under-insured.
"Financial times are tough and many households have reduced their sums insured in a bid to try and cope with skyrocketing living costs. What most forget to factor into their decision is the fact that you will most likely have to replace all your household content and possibly even the entire structure of your home in the event of a catastrophic event," said Barrett.
Poor workmanship could also contribute to claims being rejected.
*This article has been updated to include a response from Absa.