No further flood insurance for Mariental

By: CHRISTOF MALETSKY

MARIENTAL residents and businesses suffered a major setback on Friday when the Namibia Insurers' Association (NIA) announced it had decided not to cover the town's flood-affected areas any longer.

The decision will take effect from October.

NIA said its members had taken a collective decision to exclude

any future losses resulting from flooding of properties situated

downstream of the Hardap Dam and the lower Fish River.

 

The decision follows massive flood-associated losses of more

than N$100 million in the Mariental area following heavy rains at

the end of February.

 

No immediate reaction was available from the Mariental

Municipality.

 

However, the NIA decision was expected to result in a massive

sale of houses in the flood zone.

 

"The only problem is to find buyers.

 

Maybe the municipality should buy our houses because they sold

the land to the builders," said one business owner in the flood-hit

area.

 

A spokesperson for the Namibian Insurers' Association (NIA) said

the flooding of Mariental had been a contentious issue for

years.

 

This year alone, there have been four separate floods in the

area, costing the industry more than three times more than previous

claims.

 

The association said increased catastrophes worldwide (including

Namibia) were pushing up reinsurance premiums and this in turn

affected insurance premiums, making it more expensive for many

clients not affected by a specific catastrophe.

 

In addition, reinsurers were reluctant to provide cover for

recurring events such as the Mariental floods.

 

"Despite the fact that the short-term insurance industry is in

the business of paying claims, this type of inevitable loss cannot

continue to be covered by the industry, without other parties

contributing to the prevention or solution of the problem," the NIA

said on Friday.

 

Debates have raged in the print media as to who was to blame for

the flooding, but the issue remains unresolved.

 

While one group felt that the Mariental Municipality was wrong

in selling residential plots in the flood area, another argued that

reeds and other plants in the riverbed blocked the flow of the

water and thus led to flooding.

 

The Government, Mariental Municipality and farmers had several

meetings to discuss action plans to prevent flooding in future.

 

However, NIA said there was no quick solution to the problem and

floods in Mariental and along the Fish River downstream of the

Hardap Dam remained inevitable.

 

After the previous flood in 2000, the insurance industry imposed

a flood excess of 10 per cent of the claim, with a minimum of N$25

000, in an attempt to encourage those involved in the discussions

to take preventive or remedial action to minimise damage and

property loss in the event of a flood.

 

Initially, this measure was received with great opposition, but

as time went by it was accepted.

 

The NIA said that during the latest flood the excess resulted in

some of those insured not being able to claim, as their losses fell

within the excess - meaning they were less than N$25 000.

 

The statement said that under the current circumstances, the

insurance industry could only reconsider providing flood coverage

for this area once any loss caused by flooding could be regarded as

"a fortuitous and unforeseeable event".

 

NIA said its members had taken a collective decision to exclude any

future losses resulting from flooding of properties situated

downstream of the Hardap Dam and the lower Fish River.The decision

follows massive flood-associated losses of more than N$100 million

in the Mariental area following heavy rains at the end of

February.No immediate reaction was available from the Mariental

Municipality.However, the NIA decision was expected to result in a

massive sale of houses in the flood zone."The only problem is to

find buyers.Maybe the municipality should buy our houses because

they sold the land to the builders," said one business owner in the

flood-hit area.A spokesperson for the Namibian Insurers'

Association (NIA) said the flooding of Mariental had been a

contentious issue for years.This year alone, there have been four

separate floods in the area, costing the industry more than three

times more than previous claims. The association said increased

catastrophes worldwide (including Namibia) were pushing up

reinsurance premiums and this in turn affected insurance premiums,

making it more expensive for many clients not affected by a

specific catastrophe.In addition, reinsurers were reluctant to

provide cover for recurring events such as the Mariental

floods."Despite the fact that the short-term insurance industry is

in the business of paying claims, this type of inevitable loss

cannot continue to be covered by the industry, without other

parties contributing to the prevention or solution of the problem,"

the NIA said on Friday.Debates have raged in the print media as to

who was to blame for the flooding, but the issue remains

unresolved.While one group felt that the Mariental Municipality was

wrong in selling residential plots in the flood area, another

argued that reeds and other plants in the riverbed blocked the flow

of the water and thus led to flooding.The Government, Mariental

Municipality and farmers had several meetings to discuss action

plans to prevent flooding in future.However, NIA said there was no

quick solution to the problem and floods in Mariental and along the

Fish River downstream of the Hardap Dam remained inevitable.After

the previous flood in 2000, the insurance industry imposed a flood

excess of 10 per cent of the claim, with a minimum of N$25 000, in

an attempt to encourage those involved in the discussions to take

preventive or remedial action to minimise damage and property loss

in the event of a flood.Initially, this measure was received with

great opposition, but as time went by it was accepted.The NIA said

that during the latest flood the excess resulted in some of those

insured not being able to claim, as their losses fell within the

excess - meaning they were less than N$25 000.The statement said

that under the current circumstances, the insurance industry could

only reconsider providing flood coverage for this area once any

loss caused by flooding could be regarded as "a fortuitous and

unforeseeable event".

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