Flood damage? You could well be on your own

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In a sense, today’s Consumerwatch show is a follow-on to the one we did just after that massive storm hit KZN on the Easter weekend, nearly four months ago.

On that show, three days after Easter Monday, the day the storm was at its most ferocious, particularly in areas to the south of Durban, I began by saying that insurance assessors would no doubt be working overtime to deal with hundreds of claims.

Wikipedia calls those floods, which claimed the lives of 70 people, “One of the deadliest disasters to hit the country this decade.”

Having spoken to several people in the insurance industry, I said: 

“Clearly, after a storm as massive as the one Durban experienced this week, in most cases insurers would have a pretty hard time trying to claim that the damage was caused by anything other than the extreme force of nature. If a retaining wall which had remained intact for 30 or 40 years and then collapsed during an extraordinarily intense storm, the wall would most likely be considered to have stood the test of time and the claim would be successful.”

Well, Derrick and Philisiwe Mathe of Umlazi had been sitting with a collapsed front wall for three days as I said that; a wall that had withstood many, many storms since being built in 1987 - more than 30 years ago. They bought the house 22 years ago in 1997.

On Easter Monday, it collapsed.

In 22 years they’d never missed an Absa bond payment or Absa Insurance premium.

But the claim was denied.

In an email to the Mathe’s, Absa told them: “Having looked at our service provider’s photos, report and applicable policy terms and conditions, there is not doubt that the boundary wall collapsed due to gradual deterioration and defects in design.

“The retaining wall does not comply with good building standards and the SANS specification for retaining walls. “While the homeowner's policy provides cover for, among other perils, storm and wind, it clearly does not cater for loss or damage brought on by wear, tear, defective construction and maintenance related issues."

Like so many other homeowners, the Mathes were under the impression that the bank inspector who visited the home when they wherein the process of buying it should have picked up if any walls were sub-standard.

Mr Mathe told me: “Our understanding was that all necessary documents pertaining to all structures - roof, boundary walls, were all approved by the bank.”

In reality, that bank inspection has nothing to do with assessing an insurance risk - that bank person went to their house to see if there was sufficient value in the property to justify the purchase price, and to provide sufficient security for the bond.

I really don’t think the banks do a good enough job - if any - in explaining that to people at the time.

So the Mathes were left with a repair bill - materials and labour - of almost R30,000. 

Mr Mathe told me that Absa’s internal ombud had ruled in Absa’s favour and from what I understand, the Ombud for Short-Term Insurance did, too. In desperation, the couple travelled to ECR recently and shared their story with our news editor Shaun Ryan, who asked me if I was interested in the story.

So I took up their case with Absa.

I asked: "If that the wall was so badly built, how did it survive all manner of storms for three decades?” And: “Is Absa Insurance comfortable that it has ticked the Treating Customers Fairly box in this case?"

Absa Insurance’s Managing Executive Karen Miller responded: “We have reviewed the matter and the original decision made was in accordance with our policy. However, given the primacy that we place on our customers, the case was reevaluated, including the unique circumstances and the abnormal rainfalls experienced in KwaZulu-Natal. 

“We have decided to offer an ex-gratia payment as a gesture of goodwill for the damages incurred.”

The offer was R10,000. The Mathes have not accepted it yet; they still can’t understand why the claim wasn’t settled in full.
Assuming the Mathe’s accept that R10,000 offer, they are still short of R20,000 to rebuild that wall.

And I know the people of KZN, so I’m pretty confident that somehow that wall is going to be rebuilt. I’m just putting it out there.

As for how to avoid finding yourself in the same position: Before you buy a property, find out what your homeowner’s policy requires in terms of your boundary or retaining wall, and if you don’t know whether yours complies or not, have it professionally assessed.

Often the wall or fence has been extended, when its foundations were constructed to support a much shorter structure.

“If you discover that the walls or other structures are not built according to the required standards, you must disclose this information to your insurer so that they can adequately to assess the risk,” 

That’s the advice of the Ombudsman for Short-Term Insurance, Deanne Wood.

“It may mean that you will have to pay an additional premium in order to enjoy cover for otherwise excluded portions of the property. Or, it may mean that certain portions of the property will be excluded from the ambit of cover,” she said.

Photos of the Mathe’s collapsed boundary wall.

Also read: A business closed, but what happens to your vouchers? 

To contact Wendy, go to her Facebook page and click on the send email tab.

In case you missed any of the past Consumerwatch shows, find them below: