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News from Aon:

Is Your Home Adequately Insured against an Earthquake?

An earthquake measuring 5.5 on the Richter scale hit Orkney on 5 August 2014 and was felt in most parts of
the country. It caused structural damage to buildings, leaving many with a great deal of questions regarding
the structural integrity of buildings in South Africa.

According to Pieter Visser, a Catastrophe Analyst at Aon Benfield, poor construction can greatly exacerbate
damage. “Damage can however be prevented by enforcing building regulations, which were clearly lacking
from the amount of damage caused to properties in informal settlements, in and around Orkney,” says Pieter.

Experts are saying that we can expect more tremors like the one experienced in Orkney.
“The South African insurance industry does not have a great deal of experience in dealing with earthquake
damage, due to the low frequency of earthquake losses. The events in Orkney may lead to many insurers
reviewing the cost of damage which may hint at possible premium increases, an increase in excess payments
for earthquake damage or even exclusion of cover in areas that are prone to earthquake damage,” says
Mandy Barrett of risk consultants and insurance brokerage, Aon South Africa.
Mandy says that many South Africans are under-insured against major losses, such as an earthquake. If a
client is under-insured, they may find themselves in a situation where they are only paid partially for a loss at
claims stage. “Insurers call it the ‘average formula’ which means that if your property is under-insured by 50%
for example, they may only pay you 50% of your claim,” Mandy explains.

The services of a professional broker could well prove to be invaluable in evaluating your exposure to
earthquake risks. “A broker can ensure that you are in good hands in the event of a catastrophe and that
there are no surprises waiting for you when you claim,” concludes Mandy.

Call in the experts partner with Aon today:
0860 100 404
SMS Professional to 31762 and we will call you back*
quoteme@aon.co.za
aon.co.za

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