Page 23 - Personal Underwriting Mandates & Guidelines - Binder - Version 3

Buildings and Household contents
○ Lightning conductors
Lightning conductors actually cause more damage than good when incorrectly installed or not maintained. Their purpose is to deflect a direct strike of lightning. However, they cause other issues such as power-leakage into the ground which can then result in power surges. The actual possibility of a direct lighting strike is very remote. We have decided not to insist on lightning conductors but rather to insist on surge protection. If the client already has a lightning conductor, it must be serviced as per manufacturer’s specifications by a specialist installer of conductors and the policy must be endorsed accordingly.
○ Surge protection
Due to the increasing frequency and severity of power surge claims, surge protection is a requirement in the
absence of a lightning conductor and the relevant endorsement must be applied.
○ Fire retardants
Thatchsafe, Thatchbor, Thatch Guard, Super Cote, Fire Marshall or any other type of retardant does not necessarily improve the risk. In fact, it substantially worsens the risk if it is not maintained according to the manufacturer’s specifications or at a minimum interval not exceeding three years. Worse still, we cannot (and no one else can or does) verify the workmanship and completeness of spraying in the first instance or thereafter. It can make the thatch brittle and more susceptible to hail damage as well as rot. We therefore prefer to insure untreated thatch. Should the client already have had a fire retardant applied, the policy must be endorsed to ensure maintenance thereof as per the manufacturer’s specifications or at a minimum interval of three years. No discounts may be applied to the rates.
○ Chimneys and fireplaces
An important factor to consider when underwriting thatch risks is whether there are fireplaces present as well as chimneys that are in use. Fireplaces fuelled by solid fuels (for example, wood) contribute to an increase in fire hazard. Chimneys should be at least one metre higher than the thatch.
○ Situation
The situation or location of the property is very important. A home in a built-up urban area is a safer risk than a home in a peri-urban area surrounded by bush or fynbos. A property situated in a thatch complex results in an accumulation of high risk which means that runaway fires are difficult to contain, for example, as occurred in St Francis Bay. A bush clearing clause must be obtained from Hollard, if the home is surrounded by bush or fynbos.
Note: Use the GRiP IRiS report when unsure of the vegetation surrounding the property.
○ Rating of thatch risks
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It is important that a thatch risk is rated correctly. A fire at a building with a thatch-constructed roof will probably result in a total loss. Thatch risks are not a preferred risk category as it requires both critical mass and specialist knowledge to underwrite such risks effectively. Facultative cover is required at low exposures and comes at an additional price. Usually the underlying rate is insufficient to support a facultative premium. This results in the facility having to subsidise the facultative premium, which is not the ideal situation.
Generally a rate of 0.8% to 1.25% is charged to accommodate thatch risks. The rate could, however, be more expensive depending on the individual client’s risk profile, particularly when facultative reinsurance needs to be placed. Risks in St. Francis Bay and risks exceeding the RAL, must be referred to Hollard for quoting purposes.
Note: Harvey tile on top of a thatch roof will still be considered a thatch risk.
Personal Underwriting Mandates & Guidelines – Binder – Version 3