Mutual and Federal Insurance Warns on Flood Risks

June 24 - The danger of flooding is very real in many areas of South Africa, and Old Mutual Insurance has warned homeowners to determine their risks and make sure that they comply with National Building Regulations relating to construction below the flood line.

"Policyholders looking to insure these homes or buildings must full disclose material information related to the location of their property," said that Group Manager of Underwriting and Product Solutions for Mutual and Federal, Wayne Richards.

He said that non disclosure had the potential to result in disputes when it came to claiming and - depending on the circumstances - flood related claims may not even be fulfilled.

Richards said that a smart move would be to conduct an evaluation to determine the risk of floods in the case of property being located near water.

Municipalities as a rule offer homeowners information regarding the geographic location of their properties and whether they are situated in a flood zone.

"Mitigating this risk does not have to be a costly exercise," said Richards. "Information pertaining to danger areas is available to prospective policyholders from municipalities and such information can also be found on the internet."

In essence, a homeowner who has had a surveyor determine that the property is located within a flood risk zone, will need to provide proof from the municipality that the home was built according to municipal by laws that dictate building regulations.

"It is imperative that policyholders comply with legislation and disclose any material fact that could adversely affect the risk," concluded Richards. "This includes declaring that a building falls inside the flood line."