Insurance Power Surge Cover Changes and Electricity Grid Failure or Interruption Exclusion: How One Sure Can Help
At One Sure, we understand that navigating the ever-changing world of insurance can be challenging. That's why we're here to gladly assist with all your insurance needs, including car insurance, home insurance, contents insurance, as well as small and large commercial and business insurance. In light of recent changes in policy wording by several top insurance companies, we've prepared this blog post to provide you with an in-depth explanation of what to expect moving forward.
The following are the key points of the changes in insurance policies from several top insurance companies due to the unprecedented load shedding in South Africa and concerns about grid failure:
Grid Exclusion: Insurers have updated their terms and conditions to explicitly state that they will not cover any event(s) related directly or indirectly to an electricity grid failure. They have provided definitions for electricity grid failure and load shedding to clarify the difference between the two.
Load Shedding Cover: Load shedding, as a controlled shutdown of electric power, may be covered, but electricity grid failure will not be covered. Insurers may cover losses resulting from substation downtime not linked to load shedding or electricity grid failure, subject to policy terms and conditions.
Power Surge Benefit Changes: Insurers have made adjustments to the power surge benefits, including adding excesses from R500 up to R10,000 for every power surge claim. Inverters and other electrical installations on the distribution board (DB board) now require a new Certificate of Compliance (CoC).
Linked Burglar Alarm Warranty: Insurers have added requirements for linked burglar alarm systems, including protection during load shedding with battery backup, regular maintenance, and charging of the battery backup. Policyholders are expected to take reasonable precautions to protect insured property during load shedding.
General Exclusions: Several general exclusions have been added to policies, including loss or damage caused by a supply authority withholding power or grid failure, loss from load shedding or grid failure, and loss or damage caused by power outages, load shedding, or grid failure to refrigerated stock.
Duty to Take Reasonable Precautions: Policyholders are expected to protect insured property during load shedding, including ensuring any linked burglar alarm required by the insurer has backup power.
Santam Insurance has recently announced changes to its power surge cover and the introduction of an electricity grid failure or interruption exclusion, effective from 1 June 2023, for all active Santam personal and commercial policies in South Africa and Namibia.
Under the new power surge cover, commercial clients must have a minimum 10% excess of R5,000 for power surge damage claims. Personal lines customers will have an R2500 power surge, mechanical, electrical, or electronic damage excess under the new power surge cover. Santam's power surge cover will now exclude power surge damage from turning on electricity after 12+ hours of scheduled load shedding or grid failure.
The electricity grid failure or interruption exclusion will apply to all policies' general electricity grid failure or interruption exclusion. This exclusion includes any damage caused directly or indirectly by electricity grid failure or interruption, except as specifically provided for under the Business Interruption section for elective extensions to other premises: Public telecommunications (insured perils) and public utilities
As your dedicated insurance partner, One Sure is more than capable of guiding you through these changes and ensuring that your cover is tailored to meet your unique requirements. We encourage you to reach out to our experienced team for assistance in understanding and adapting to these new policy terms and conditions. With One Sure by your side, you can be confident that we'll help you find the best insurance solutions to protect your assets and give you peace of mind.
Disclaimer: The views and opinions expressed in this blog post are solely those of the author and do not necessarily reflect the official position or policies of OneSure or any regulatory body. The content provided is for informational purposes only and should not be construed as professional advice. Readers should consult with a licensed professional for specific guidance related to their individual circumstances.