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Category:
Insurance
News /
Short Term
Insurance /
Householders
/ February 2008
Blackouts – Are You Insured?
Alarm systems that fail to respond to a burglary because of power
failure, would not affect the claim, as long as the system was in
working order before the failure.
So
says Caroline Da Silva, Head of Portfolio Management at Santam who
has reassured policyholders not to fear that their claims for
possible burglaries incurred during the current spate of electricity
blackouts would not be paid out.
Santam says that policyholders should ensure their alarm systems and
their back up batteries are in working order, but even if it fails
to respond to a possible intruder during blackouts, policyholders
would still be covered for the losses incurred.
She
says the general rule of whether businesses or consumers will be
covered as a result of electricity blackouts is whether the
interruption was caused by damage as a result of a specific peril
named in the policy such as fire, lightening or impact.
“The recent power cuts have not been due to a peril but the result
of load shedding, a deliberate withholding of power from certain
areas for short periods of time to prevent system overload.
“Santam’s personal and business policies don’t cover situations
where power is deliberately withheld by the provider or where the
interruption is a result of utilities being unable to supply
sufficient power (intentional power cuts, i.e. load-shedding)."
"This exception applies to most personal as well as business
policies. This therefore may impact on how insurers respond to, for
example, loss of goods from freezers. These are not covered in the
event of deliberate withdrawal.
“However, if the client has purchased accidental damage cover and a
fridge or freezer is damaged as a result of a power surge or spike
then the damage to the unit will be covered.
“Computers will also be covered for power surges, if the client has
bought all risks cover for electronic equipment. In addition, pool
pumps and gate motors that burn out as a result of a surge will also
be covered if the client has specifically taken out optional
accidental insurance for these items.”
According to Da Silva a business interruption policy would in a
hypothetical situation pay out, where for instance, power to an
insured's factory is interrupted following, say, a lightning strike
at a power supplier, or a fire at a sub-station, such as
Johannesburg's Hurst Hill which was down for three days two years
ago following a fire, resulting in loss of profit and refrigerated
stock for businesses.”
For
businesses that are really reliant on power supply, cover is
available, called Public Utilities cover, which extends the above
cover beyond specific perils like lightening and fire, to mechanical
and electrical breakdown which results in the interruption of power
supply.
“There are two important things to consider here, the first is that
when the loss is as a result of mechanical or electrical breakdown
at the supplier, cover only kicks in once the power is down for 24
hours or more, some policies may even specify 72 hours of
interruption before they will pay out."
"The second is that these policies also exclude deliberate
withdrawal of power by the supplier so load shedding would not be
covered."
“We
encourage policyholders to contact their insurance brokers if they
are unclear about their exact cover. But our clients can rest
assured that we will evaluate all claims individually, taking into
account claimants’ specific circumstances”.
In
order to help businesses and consumers minimise their possible
losses caused by the electricity blackouts, Santam has put together
this handy list:
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Lightening and surge protection products can protect your PC,
pool pump, gate motor and other electronic items to reduce the
risk of burnout.
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Check the battery of your alarm system and other stand-by items
such as your electronic garage doors.
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Ensure that all computerised appliances have surge arrestors.
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Don't open and close the fridge when the power is off, it helps
the contents to remain cooler for longer if it stays closed.
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Be careful when using gas heaters.
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Ensure that you acquire fire extinguishers to limit possible
losses caused by fires.
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If you purchase a generator, ensure that it is fitted by a
qualified technician according to the prescribed standards.
Source: ITInews – Insurance
Times and Investments Online
www.itinews.co.za
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