It’s the most dangerous time of the year

10 December 2018 Jonathan Faurie

On 18 November, Eskom implemented Stage One load shedding after struggling with coal supply issues for many weeks. On 19 November, the power utility announced that there would be a strong possibility that there will be load shedding during the festive season.

This is not good news and comes at a time that many people are planning to go on holiday for the festive season. 

Where does this leave policyholders as we know that thieves and criminals are most active during the festive season? FAnews spoke to Marius Neethling – Manager: Personal Lines Underwriting (Systems and Administration) at Santam – as well as Marius Steyn, Manager: Personal Underwriting (Technical) – to find out more about how brokers can make sure that clients are protected against the risks associated with load shedding. 

Pertinent risks

There are a number of risks that are associated with load shedding and Neethling points out that it is important that brokers engage regularly with their clients when it comes to these risks. 

“When it comes to power shortages, rotational power surges are implemented, and this propels risks of damage to home and electronic appliances if accidentally left on during load shedding. Power surges also prompt fire damage, and it is important that policyholders understand what they are covered for,” says Neethling. 

Steyn adds that intermediaries are an important part of this process in making sure that people understand their risks and take the necessary precautions to make informed decisions. 

“During this time, a lot of people leave their homes over the Christmas period and return in the beginning of the year. There are many risks associated with this, such as burglary as a result of faulty alarms. To prevent unforeseen damages and losses, brokers need to urge clients to revisit their insurance cover and obtain advice to take into account different circumstances and risk situations which may arise as a result of power cuts,” says Steyn. 

Robbery in progress

Let us consider a hypothetical situation. A policyholder suffers a burglary at his house over the festive season while he was away for the holidays. Before he went away, he checked whether his alarm system was in working order (which it was). The policyholder’s alarm system did not go off as a result of the backup battery running flat because of prolonged load shedding. 

Where does the policyholder stand in his situation?   

"Each claim is handled on its own merits. However, an insurer will typically not unduly prejudice a policyholder. If the insured armed/ set the alarm before leaving the premises, then he would have complied with the alarm requirement and not be in breach of the terms and conditions of the policy contract. The policy contract remains the basis for all claims settlements,” says Neethling. 

Electric avenue

Let us consider another hypothetical situation; a policyholder goes away for the holidays and comes back to find that some of his appliances suffered major damage as a result of power surges after the power coming on following load shedding. 

Obviously, at the time when he went away, there was no load shedding and therefore no need to unplug key appliances to prevent the surges from affecting the appliances. 

Where does the policyholder stand now? 

“Firstly, we need to establish if the client had household contents insurance. One must first establish if the insured has the relevant cover for such a loss; in other words, does the client have the contents within the house insured on the policy with the necessary accidental damage / power surge cover included. The policy does not require the insured to unplug non-essential electrical appliances,” says Steyn. 

Load shedding is becoming a fact of life in South Africa, and criminals are not as opportunistic as people would care to believe. Are brokers having these important discussions with clients? 

Editor’s Thoughts:
The festive season is unfortunately a season of joy for criminals. Criminals know the load shedding schedule of suburbs better than homeowners, making sure that clients have the appropriate cover in place will be an essential part of the duties of broker this festive season. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts

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