What load shedding means for your insurance in South Africa

Persistent and long power cuts could cause serious damage to consumers’ properties and belongings – leading to various kinds of insurance policies being triggered, says Mtho Maphumulo, a senior associate for Adams & Adams.

Load shedding has returned as the new normal, with stage 5 implemented from Tuesday (20 September) following a stint of stage 6. The government is scrambling to procure new generation capacity to bring the grid back up to speed however, South African households are often left in the dark regarding what load shedding means for damage to their property.

Maphumulo said that despite being insured, not all insurance claims are approved and subsequently paid out. Recent data points to a trend in which short-term insurance claims are being rejected more often.

Short-term insurance policies traditionally cover household appliances and the home in general – entities that could be exposed to damage through fluctuations in electricity supply.

Individuals differ from businesses in having the financial muscle to challenge insurers that reject claims, he added.

Prolonged load shedding can have undesirable ramifications on personal property, such as:

• Break-ins;
• Theft;
• Robberies;
• Fires;
• Damage to electric appliances, and more.

Given the importance of insured items, it is crucial that policyholders take steps to enhance their chances of claiming success in the event of any loss or damage to the insured items, said the legal expert

Maphumulo noted that there are a few methods to enhance one’s chances of claiming successfully when such claims arise – especially during load shedding.

He listed the following steps in aiding the approval of a short-term insurance claim:

• Updating the policy;
• Ensuring that policy conditions are adhered to at all material times;
• Any material changes to the home/house conditions are communicated to a broker or insurer;
• Any uninsured defects that may impact on the insured items are repaired soonest, and;
• Ensure that all the required mitigating equipment is installed and is in a working condition. These may include having fire insulators, fire alarms, fire extinguishers, prescribed door locks, etc.

The above steps only enhance one’s chances of claiming successfully, said Maphumulo.

“Where one has a claim, it is important to report and lodge the claim timeously (soon after the incident); and provide all the required documents, and information to enable an insurer to process the claim.”

“Where one’s claim has been rejected, it is important that due consideration is given to the rejection, the reason(s) thereof, and possible ways of challenging same.”

He said that this is important because a policyholder would have paid premiums for such cover with the hope that they will be covered in case an insured risk arises. Although the insured can do an internal appeal and further make submissions to the Ombudsman’s Office without any legal assistance, it is also advisable to source legal assistance.

Article with thanks to BusinessTech.