Short term insurers report an increase of up to 50% in claims for load shedding damage as the country faces a new week of rolling blackouts, saying all load shedding activity has an impact on their claims.
Anneli Retief, head of Dialdirect Insurance, confirms that power surge claims are on the increase and says the company’s power surge claims have doubled over the past four years.
“Dialdirect compared the number of burglary incidents and vehicle accidents when there is no load shedding to when there is, from July 2019 to May 2022. We found that during the week, load shedding resulted in a 3.2% increase in burglaries and a 5.2% increase in vehicle accidents.
“Over the weekend, these figures more than doubled, increasing the risk of break-ins by 8% and that of vehicle accidents by 13.5%.”
Lizo Mnguni, spokesperson for Old Mutual Insure, says continued and intensive loadshedding affects homes and businesses, with the main impact coming from power surges.
“An overlooked risk comes from fire as a result of loadshedding. If you are away and some of your electronic equipment is still plugged in when power comes back on, it can cause a fire. We have seen several instances where this has happened, which results in more damage for the insured.”
All home electronics, such as TVs, fridges, computers and routers are at risk and in extreme cases, Old Mutual Insure even had claims for spoiled food as a result of extended power outages caused by load shedding and cable theft.
Power surges and dips cause load shedding damage
Natasha Kawulesar, chief client relations officer at Outsurance, says the intermittent power supply due to load shedding results in power surges and dips that can cause damage to electrical circuits, and in some instances result in fires.
“In the majority of cases the circuit damage renders the item uneconomical to repair. There is a noticeable increase in these types of claims during periods of load shedding. We settle these damage claims in full, less the excess amounts payable by our clients.”
Precious Nduli, head of marketing and technical marketing at Discovery Insure says the company’s personal lines business experienced an increase of more than 50% in claims for damages caused by power surges over the first six months of 2022.
“In June 2022, a period during which load shedding was ramped up, we received an average of 300 claims a week. We found that the household electronics and appliances most commonly affected by power surges following load shedding were TVs, fridges, washing machines, and microwaves.”
She advises consumers to take precautionary measures to protect these items, as their replacement can cause an unnecessary burden on household income. Consumers must ensure that they have adequate power surge cover from their insurer, along with using safety devices such as surge protectors and power strips.
Take precautionary measures to prevent load shedding damage
Ricardo Coetzee, head of Auto & General also confirmed that power surges after loadshedding caused a marked increase in claims.
“We urge South Africans to take the necessary precautionary measures and ensure that they have comprehensive insurance cover in place.”
Tyrone Lowther, head of Budget Insurance, says with South Africans’ budgets under pressure already due to the ever-increasing cost of living, it is imperative for them to safeguard against costly repairs by making sure that they are adequately insured.
Seugnette van Wyngaard, head of 1st for Women also noted a sharp increase in claims related to power surges.
“It is absolutely vital to ensure that you are informed about the impact of load shedding on devices, appliances and your personal safety. Load shedding is a highly opportune time for criminals to strike.”
Fires, break-ins and car accidents also increase during load shedding
Philippa Wild, head of commercial underwriting at Santam, says the insurer also noted a significant increase in claims for loadshedding damage to sensitive electronic items due to power surge across its personal and commercial insurance portfolios.
“When load shedding stages increase, so does the frequency of the rotational power cuts, which has a replica impact in increased risk of damage to sensitive electronic items due to power surges, fires and crime as a result of security systems not operating properly.
“The reality is load shedding has an immense impact on consumers and businesses alike. They must cope with the loadshedding damage to appliances brought on by power surges and dips, as well is the increased crime related risks as a result of faulty security systems.”
Santam encourage consumers to consider limiting the risk of load shedding damage by:
- Using surge protection as installing a surge protection device can help minimise some damage in unforeseen situations. These can be fitted to your electrical distribution board or at the power outlet to the electronic device.
- Ensuring that your alarm system works and the back-up battery is fully functional.
- Keeping a spare torch or headlamp in your car if you arrive home at night during a power outage.
- Saving emergency contact information on your phone, but also keep a paper copy safe and accessible.
- Charging your cell phone, laptop and tablet before blackouts and again as soon as possible after the power returns.
- Using gas for cooking and lighting or preparing meals beforehand.
- Keeping bottled water in the freezer to keep food cold during a power outage.
- Unplugging your devices.
- Backing up your data in case of a hard drive crash or unforeseen electrical fault.