By Hoandi !Gaeb Mariental Mariental’s central business district has been hammered with the announcement by the Namibia Insurance Association that no insurance will be available for losses resulting from flooding of properties situated downstream of the Hardap Dam and the lower Fish River as from October 1 this year. Mariental’s central business district is still struggling to come to terms with the devastating flood at the beginning of the year and this announcement can be seen as the end of insurance coverage for business and residences in the western part of the town. One of the town’s major business enterprises, Spar, also situated in the flood areas, has not yet opened its doors for business since it shut operations following the floods. Spar, like many other shops in the central business district suffered massive losses running into millions of dollars after the worst flood recorded in the history of the town in February. In a statement this week, the Namibia Insurance Association says it has taken a collective decision to exclude any future losses resulting from flooding of the western parts of the town. It says the decision comes after flood-associated losses of more than N$100 million were incurred. The association states that the flooding of Mariental has been a contentious issue for years now. This year alone, there have been four separate floods in the area costing the industry more than three times the previous claims. It further states that increased catastrophes worldwide (including Namibia) are pushing up reinsurance premiums and this in turn affects insurance prices, making it more expensive for many clients not affected by a specific catastrophe like the current spate of floodings. In addition reinsurers are reluctant to provide cover on recurring events such as the Mariental floods. The NIA says despite the fact that the short-term insurance industry is in the business of paying claims, this type of inevitable loss cannot continue to be covered by the industry, without other parties contributing to the prevention or solution of the problem. According to the statement, debates have been raging in the print media as to who is to blame for the flooding, but the issue remains unresolved. The government has engaged in discussions with various parties and put forward possible action plans to prevent flooding in future. However, the insurance industry believes there is no quick solution for the problem and flooding of the Mariental area and the Fish River downstream of the Hardap Dam remains inevitable. The statement continues that after the previous flood, the insurance industry imposed a flood excess of 10 percent on claims with a minimum of N$25 000 in an attempt to encourage stakeholders to take preventative or remedial action to minimize damage and property loss in the event of a flood. Initially, this excess was received with great opposition, but as time went by, it was accepted. However, during the latest flood, it resulted in some of those insured not being able to claim, as their losses fell within the excess payment. The statement said that under present circumstances the insurance industry could only reconsider re-instatement of the flood peril for this area once any losses caused by flooding could be regarded as a “fortuitous and unforeseeable” events. In order to effect the exclusion, each policy will be endorsed with the following: “Mariental flood Exclusion” with effect from October 1, 2006. Following this year’s floods one of Namibia short-term reinsurance giants, Old Mutual announced that it would develop a business complex in the eastern parts of Mariental as a way to relocate businesses situated in the flood prone areas. An Old Mutual property development team is expected shortly in the country to work out modalities of the planned scheme.