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Following a deal with regulators in July, Santam pledged to pay up to R1 billion in aid.
CAPE TOWN – The nation’s largest short-term insurer, Santam, has paid more than R850 million in aid payments months after policyholders filed claims hard hit by the COVID-19 lockdown.
The business interruption claims were initially rejected with Santam and other insurers reluctant to comply with the policies because, in their opinion, the damage was caused by the government lockdown and not the actual pandemic.
Following a deal with regulators in July, Santam pledged to pay up to R1 billion in aid.
So far, the financial services company had made aid payments to more than 2,000 policyholders who had contingent coverage for business interruption.
Aid payments were set at a minimum of R25,000 and a maximum of R1.5 million.
Most of the insured were small, medium and micro-enterprises (SMEs) operating in the tourism and hospitality sectors severely affected by the pandemic.
However, a body representing more than 700 tourism businesses in their fight to get insurers to pay their business interruption claims was appealing to insurers to include larger businesses in their aid options.
Insurance Claims Africa said that only about 200 of its clients were currently benefiting from the relief measures.
It is a provisional measure, while insurers seek legal security in the courts.
The Ma-Afrika Hotels hotel group’s case against Santam was expected to be heard in Western Cape Superior Court on Tuesday.
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