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Santam power surge insurance claims reduce by 80% thanks to consumers

Santam power surge insurance claims reduce by 80% thanks to consumers

Load shedding or rolling blackouts are not an insurable risk under an insurance contract. However, insurers such as Santam do offer cover for damage to sensitive electronic items that are caused by power surges.

Over the year to August, insurer Santam reduced the number of power surge-related insurance claims from 5,000 a month to just under 1,000 a month — through consumer education.

Power surges and dips happen as a result of load shedding, causing damage to electrical and electronic equipment. When load shedding stages increase, so does the frequency of the rotational power cuts, which has a follow-on impact in terms of an increased risk of damage to sensitive electronic items.

Insurer Dialdirect says there has been an 80% increase in power surge claims in 2022/2023 when compared with the three previous years — this correlates with a 970% GWh (gigawatt hours) increase in load shedding for the same period. 

Santam’s head of personal lines underwriting, Attie Blaauw, notes that you should check your insurance to determine whether you have cover that includes damage caused by power surges. 

“Although load shedding and/or blackouts are not an insurable risk under an insurance contract, the damage to home contents, caused by power surges, is often covered by insurers. But again, this is dependent on the individual product. In some cases, it is included and in other cases it is an optional add-on for which the appropriate cover limit must be selected. 

“The power surge cover limit should also be reassessed regularly to ensure all new electronic equipment is covered for the correct replacement value,” Blaauw says.

What Santam clients did to reduce the number of claims:

  • Make use of surge protection: Installing a surge protection device can help minimise some damage. Have a surge protection device fitted to your electrical distribution board or alternatively at the power outlet to the electronic device.
  • Ensure that your alarm system is in good working condition and that the backup battery is fully functional to provide power to the system in the event of load shedding.
  • Have a spare torch or headlamp: Keep a torch in your car if you arrive home at night during a power outage. Most smartphones have a built-in torch or torch apps which come in handy during unexpected power outages.
  • Easily accessible emergency contact information: Save emergency contact information on your phone and keep a paper copy safe and accessible. It should include contacts for emergency services such as the fire department, police and/or medical services. Include the contact information of friends and/or family and make sure that insurance information is accessible.
  • Charge your cellphone, laptop and tablet: Ensure your cellphone, laptop and tablet devices are fully charged ahead of scheduled blackouts. Be sure to charge them again as soon as possible after the power returns. It is also a good idea to have an emergency phone charger (like a power bank) close by, as this comes in handy during extended power outages.
  • Unplug your devices: Consider any electrical connection as live during a power outage as power can return at any time. Unplug or switch off at the wall any electronic devices or equipment including telephone cables. This helps avoid power surge damage when the power supply is restored.
  • Back up your data: It is important to back up data in case of a hard-drive crash or unforeseen electrical fault. Online cloud-based backups are very convenient and are mostly automated, which means that you have one less thing to worry about.

“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,” Blaauw says. DM

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Comments - Please in order to comment.

  • Hen'ri Mostert says:

    I am an insurance broker and I see it every day. How many people that deal with call center insurers are not correctly insured.
    Get a broker that you can speak to face to face!
    Plus get more than one Quote and Opinion.
    And get it in writing!

  • Andre Stols Stols says:

    The costs of a DB Board power surge protector is about R 400,00 plus the electrician for the installation. I had many problems with Micro wave ovens, Refrigerators and other electronic goods before, but since I put this protector in about 7 years ago, NIL problems for power surge and to an extend, also some lightning strikes.

  • bigbad jon says:

    My place is insured thru Hollard and they have cut their losses due to ‘surge payouts’ to almost zero I suspect. They simply excluded damage due to power surges (unless a certified surge protector is installed) from their policy in an ‘update’ a year or two ago..

  • Auke Van Der Meulen Van Der Meulen says:

    Not really the truth. They reduced the claims by removing any surge cover from their policy.

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