Understanding borehole insurance and compliance for homeowners

For many reasons, including the desire to build more drought-resilient homes, South Africa has seen an upsurge in residential borehole installations. According to the Department of Water and Sanitation, between 80,000 and 100,000 boreholes are installed every year. Local homeowners need to be aware of the insurance implications of owning a borehole, how to get the right cover, and most importantly, why it’s important to have it drilled by a qualified professional.

Get a borehole – but make it compliant.

Recent headlines have highlighted the potential risk associated with borehole drilling, particularly when it’s done without proper planning and adherence to regulations. These risks extend beyond individual properties and can lead to damage to underground infrastructure and disruption to essential services.

According to Youlon Naidoo, executive head of claims and procurement at Miway, this issue also highlights the importance of understanding how borehole installation impacts home insurance cover. “Installing a borehole is an effective way to ensure an uninterrupted water supply and reduce reliance on municipal water,” he explains. “However, any form of underground drilling can affect the structural integrity of your home, impact neighbouring properties, and alter the health of the surrounding soil.”

Naidoo stresses that compliance is the most critical part of the process. Borehole drilling must be approached with proper planning, adherence to safety standards, and alignment with regulatory requirements to minimise risks both during and after installation.

Homeowners and service providers alike should be aware of these responsibilities to ensure safety, legal compliance, and appropriate insurance coverage.

Important regulatory issues to consider

Firstly, the regulation prescribes that any homeowner wishing to drill a borehole must have a hydrogeological study conducted to identify any potential issues with water quality and availability. Next, the homeowner needs to obtain a water use licence from the relevant municipality as well as an Environmental Impact Assessment (EIA) and a Drilling Permit.

The drilling itself needs to comply with the proper technical, environmental, and safety requirements as set out by the Department of Water and Sanitation, The National Water Act, municipal by-laws, and the South African National Standard SANS 10299 guidelines. Service providers also need to comply with several safety requirements to protect the health and safety of their employees during the installation.

For this reason, as Naidoo explains: “Many insurance policies may not cover damages caused by non-compliant boreholes. Just like with any structural insurance claim, where we’d look into whether your home was built by a registered builder, the same applies to borehole installations.

Homeowners need to make sure the installation was done by a qualified, reputable contractor, and that all the necessary permissions and legislative requirements, such as those outlined in SANS 10299, were met. When it comes to boreholes, getting it done right from the beginning could save you a lot of unnecessary stress, time, and expense if something goes wrong."

How borehole insurance cover works

The cost of replacing or repairing a borehole is covered by most local insurers; not as part of a separate standalone policy but as part of home insurance cover. Miway Buildings insurance policyholders, for example, enjoy cover on their property’s permanent fixtures, fittings, and improvements, which include boreholes. It’s important, therefore, that homeowners add their borehole to their insurance policy as soon as it is installed.

There is also a third-party side of borehole insurance cover to consider. For example, Miway covers clients for any damage caused to a neighbour’s property during borehole installation. As in other cases, however, checks and balances apply, including compliance-related factors such as whether the right kind of drilling equipment was used, whether the technical requirements were followed, and whether all safety elements were considered. This again, is where hiring a qualified professional can make all the difference.

The homeowner’s duty of care

Homeowners need to remember that they have a duty of care to ensure that their borehole is properly maintained, just as they would in the case of their home or car. Some important steps include checking the system for leaks, inspecting the pump, and assessing the filters to ensure that the water is being properly cleaned.

These routine checks are relatively affordable but in the long term, will help you protect your investment and make sure that if anything unexpected occurs, your insurer can step in to help.

As Naidoo concludes: “As an insurer, we play an important role in helping homeowners understand these factors so that they can avoid being underinsured or having a related claim declined due to a lack of due diligence. From an insurer’s perspective, if you can tick the compliance boxes, you’re on the right track.”

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