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South Africa’s property insurance sector is facing fresh challenges as crime rates rise and climate-related disasters become more frequent, forcing companies to change how they assess and price coverage.
Industry experts say the days when homeowners only needed to lock their doors and set an alarm to stay safe are long gone. The reality now is that shifting weather patterns, frequent floods, and unpredictable crime trends are forcing insurers to constantly review how they calculate risk and what they charge customers.
Ryno de Kock, Head of Distribution at PSG Insure, explained that to remain protected, homeowners and businesses need insurance policies that keep pace with these growing threats. He noted that burglary remains the leading property-related crime in the country, accounting for 44% of all reported cases.
To remain insurable and avoid rejected claims, De Kock said property owners must ensure their security systems are functional, well-maintained, and compliant with their insurance agreements. This includes having alarm systems linked to armed response units, backup power where necessary, sturdy locks, gates, burglar bars, and regular updates to insurers if any changes are made to the property structure that could affect access points or visibility.
He added that in high-crime areas, installing extra features such as CCTV, electric fencing, and motion-sensor lighting could help reduce premiums or improve underwriting outcomes.
While crime has long been a problem in South Africa, extreme weather has now become an equally serious concern for insurers. The devastating June 2025 floods in Mthatha, which claimed over 100 lives and submerged entire neighbourhoods, are a stark reminder that climate-related disasters are increasing in frequency and severity.
In the past decade, local insurers have reported a sharp rise in claims linked to flash floods, blocked drainage systems, lightning strikes, high winds damaging roofs and walls, and fire outbreaks in urban areas close to wild vegetation, such as communities near Table Mountain.
To better understand risk exposure, some insurers are using a system known as “geocoding” — a method that combines GPS-based location data, historical claims records, and predictive modelling to identify areas with higher chances of future losses.
“Geocoding does not just focus on past events; it predicts where risks may emerge. For example, some areas that never experienced flooding before are now considered high risk because of shifting rainfall patterns and poor drainage,” De Kock explained.
The same approach applies to properties near fire-prone vegetation, where higher premiums or even exclusions from certain coverage types may apply. This means even if a homeowner has never filed a claim before, their location alone could lead to higher insurance costs, extra conditions, or outright denial of coverage.
PSG Insure also advised homeowners to perform seasonal maintenance to reduce the risk of claims and keep their insurance valid. During the cold season, property owners are encouraged to clear gutters and drains to prevent flooding, service heating equipment to lower fire risk, and check roofs for loose tiles or leaks.
De Kock also warned that any major changes to a property, such as renovations that affect its structure or use, must be reported to the insurer to avoid disputes during claims.
Earlier this month, South Africa’s National Treasury released two documents — the Disaster Risk Strategy and a survey of municipal experiences in disaster management — aimed at improving the country’s disaster risk insurance framework through greater private sector involvement.
Treasury highlighted that while South Africa has the largest and most developed insurance market among middle-income countries, comprehensive natural disaster coverage is still mostly purchased by middle- and upper-income households. Most public infrastructure remains uninsured, which places a huge financial burden on the government when disasters strike.
Agriculture insurance is also limited, with policies mainly available to large commercial farmers, leaving small-scale farmers exposed to weather-related losses.
Analysts say without broader coverage, both private citizens and public authorities will continue to face significant financial risks as crime trends and climate events evolve.
