The average cost of a pothole-related insurance claim at Santam, South Africa’s largest insurer, is between R20,000 to R25,000.
Claims of this level are generally a result of a substantial impact with a pothole and include the replacement of two or more tyres, repairs on bent rims, and, occasionally, suspension refurbishments.
“Those costs can add up, and of course, with inflation as well, we see that those costs are increasing over time,” said Thabo Twalo, Santam Head of Commercial Underwriting, in an interview with eNCA.
In just the first 10 months of 2023, pothole-related claims at Santam have soared by 40% in comparison to the entirety of 2022, with the rate of claims expected to accelerate even more as the rainy season approaches.
In some cases, Santam has been able to prove that the municipality was negligent with regard to road repairs and recover a portion of the money it spent on paying out a claim, assisting the insurer to “keep the average cost of claims manageable,” said Twalo.
Opportunists beware
Pothole damages are generally covered under comprehensive insurance policies in South Africa and follow the same process as any other type of claim, including an investigation into the incident and the payment of a pre-determined excess amount.
However, Twalo said there have been several cases where Santam clients attempted to claim for other damages or wear-and-tear items under the guise of a pothole-related event.
“We have our panel of claims experts that are able to recognise that the damage is more due to wear and tear than the actual sudden impact,” he said.
“What we can also see from our claims data is that you will have some people who might claim for an engine-related loss and using potholes as an excuse, and, therefore, sometimes you can easily tell that this is someone who is trying to take chances.”
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