The possibility of water supply cuts in event of severe drought: How could this effect the insurance of buildings?
South Africa has been experiencing one of the most severe droughts in many decades. Coupled with less natural precipitation, there is an increased demand for water in more densely populated urban areas due to economic migrations. We have witnessed local municipal authorities instituting stringent water usage restrictions and in some areas, there are water supply pressure reductions and even cut-off periods.
The reality is that the Western Cape – and particularly the city of Cape Town – is currently experiencing one of the worst water supply crises in many decades. It is not unrealistic to believe that the City’s water supply could possibly run dry.
The question arises: What if water-fed fire protection equipment (hose reels and sprinkler systems) cannot function? How does this effect my insurance cover in event of fire?
We have canvassed a few insurers for a response to this concern and the general response consensus is as follows:
Subject to normal fire protection equipment servicing conditions, under normal conditions, the insurer cannot unfairly or unreasonably prejudice the client in event of any claim for fire damages where water supply is either pressure-reduced or cut in circumstances of local authority supply interventions.
There is another downside to water supply cuts. There is a higher likelihood for a rise in ‘accidental flooding’ events. This occurs when property owners or cleaning staff may inadvertently leave taps open and forget to shut them before water supply is restored. Water reticulation supply pipes function under water pressure which increases the likelihood of exposing piping defects as a result of sudden surges or spikes in water pressure when water supply is re-instated. These could also lead to flooding events.
Our intention for this article is certainly not to be alarmist but rather to urge caution and encourage our clients to actively conserve our scarce water resource.
Author: Brian Addison, Addsure
Contact Addsure – The Leaders in Sectional Title Insurance – for fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069