How crime and climate risks are driving regular property insurance reviews and price assessments

The constant evolution of crime and climate risks is making property insurers regularly review and adapt how they assess and price cover.

While keeping one's property safe used to be as simple as locking the doors and setting an alarm, the shifting weather patterns and evolving crime trends are changing how South African insurers assess risk, says Ryno de Kock, head of distribution at PSG Insure.

To stay protected, he said, homeowners and businesses need insurance that keeps pace with these growing threats. Recent crime statistics show that residential burglary remains the most prevalent property-related crime across the country, making up 44% of all property crimes.

To remain insurable and to reduce the risk of claim repudiation, home and business owners must keep their security features well-maintained and fully operational.

“This includes checking that alarm systems are functional and linked to armed response and back-up power where required, ensuring all locks, gates and burglar bars are in place, and updating insurers if any structural changes impact access points or visibility,” says De Kock.

Additional risk-mitigation measures, such as CCTV, electric fencing and motion-sensor lighting, may also reduce premiums or improve underwriting outcomes in high-crime areas.

While crime is a persistent issue, extreme weather has emerged as an equally serious concern in recent years.

De Kock says that the tragic June 2025 floods in Mthatha, where over 100 people lost their lives and entire neighbourhoods were submerged, serve as a stark reminder that climate-related risks are escalating.

Once considered seasonal anomalies, these extreme weather events are becoming regular occurrences, with costly consequences for the insured. Over the past decade, local insurers have seen significant increases in claims related to:

• Flash floods and blocked drainage systems.
• Lightning damage during storms.
• High-wind destruction of roofs and walls.
• Fire outbreaks in urban-wildland areas (such as suburbs around Table Mountain).

To better understand risk exposure, the insurer said some insurers have adopted a method called geocoding. This uses GPS-based data, historic claims information and predictive modelling to assess how risky a location is for certain losses.

“Geocoding allows insurers to evaluate not just where past claims have occurred, but also where future risks may emerge. For example, areas not traditionally prone to flooding may now be flagged as high risk due to shifting rainfall patterns and inadequate drainage,” he says.

Similarly, properties bordering fire-prone vegetation may carry higher premiums or be excluded altogether from certain types of cover.

This means one's quote could be affected by where their property is situated, even if they have never made a claim before. If their area is identified as high-risk, insurers may apply additional conditions, increase excesses, or, in some cases, decline the request for cover altogether.

PSG Insure said with the colder months set to continue for a little while longer, homeowners should perform the recommended winter maintenance tasks to prevent avoidable claims and keep their policy valid. This includes:

• Clearing gutters and drains to avoid water build-up and flooding.
• Servicing heating equipment to reduce fire risk.
• Checking that your roof is in good repair and free of loose tiles or leaks.

Finally, De Kock emphasised the importance of notifying one's insurer of any major changes or renovations, particularly if these affect the structure, use or risk profile of the property.

Earlier this month, the National Treasury released two documents on enhancing South Africa’s approach to Disaster Risk Insurance by better using private sector participation. Those were the Disaster Risk Strategy and a survey of municipalities' experience of managing disaster risk

South Africa is said to have the largest and most mature insurance market of all middle-income countries. While property insurance is widely available, and while the most comprehensive policies cover natural disaster risk (including earthquake, strong wind, flood, hailstorm, landslide, and subsidence), policies are tailored to and bought by middle-and upper-income households.

This is indicative of trends for other insurance products, including agriculture insurance, which is currently available only to commercial farmers.

Most public infrastructure is uninsured, placing a large contingent liability on the government, National Treasury said.