The Surge That Surprises Many

When it comes to our financial and risk planning, we often look at the common causes of disruption to our lives and business. One that has taken many by surprise has been the impact of power surges after load shedding (and all that gets disrupted during load shedding, too!).

Whilst many of our clients have put contingency plans in place to try and mitigate the losses of downtime during load shedding, the problem of surges has added additional disruption when sensitive electronics are damaged.

Discovery Insure CEO Anton Ossip was quoted in a News24 article saying that when the power comes back on, it creates havoc in people’s homes. Load shedding in recent months resulted in Discovery Insure paying more out on surge claims than on theft of contents, with an average of 300 claims a week.

Our team at Olea South Africa, previously APIO have read numerous reports of increased insurance policies being triggered by persistent, pervasive and prolonged power cuts. Despite being insured, we’ve also seen that not all insurance claims are approved and subsequently paid out.

Recent data that we have been tracking points to a trend in which short-term insurance claims are being rejected more often. The types of claims that are typically triggered have included things like break-ins, fires, damage to electronics and more.

“The reality is load shedding isn’t going away any time soon, and damages will occur, but everyone has a responsibility to ensure they are prepared for the power cuts and can take steps to minimise the chance of damage as far as possible,” says Attie Blaauw from Santam.

Given the importance of insured items at homes, home offices and business premises, you must ensure that you have taken recent steps to protect these items – itemising them if necessary – against damage or loss from power surges or load shedding-related events.

Load shedding or blackouts are not an insurable risk under many insurance contracts. However, most insurers offer cover for damage to sensitive electronic items caused by power surges.

If you need to revisit your insurance policies, please feel free to reach out to our team so that we can help you keep your home and business running with minimal interruptions relating to your risk cover.