How to claim Eskom damages
While complaints over power problems are common in South Africa, it is often thought that nothing can be done in terms of compensation when it comes to losses suffered from Eskom induced blackouts.
But it appears, that in some circumstances, it is possible to get some compensation.
Following a recent outage, Allison MacDonald experienced further problems when a local substation blew up resulting in her not having power for almost 36 hours. Because of this, the food in her fridge started to defrost and rot, leaving her with nothing to eat.
MacDonald is insured with Alexander Forbes and said that this is the third claim that she has made to insurers relating to deterioration in food.
“I put my claim in [on Thursday 23 April] for ‘loss of fridge/freezer contents’ and will receive full settlement by the weekend. In the region of R 3000 with no excess,” said MacDonald.
However, the first claim that MacDonald put in, she didn’t get any money back.
“[For the] first time, about five years ago, I was with Outsurance. My cover was R3,000. When I put in the claim, I first had to pay them R1 500 excess, and then they gave me R1 500 food gift vouchers. Which means, in essence, I got zip, zero and nothing for my loss,” claims MacDonald.
For the second claim, MacDonald had moved insurers to Alexander Forbes and put in a claim for R3000, which was paid into her account, with no excess. This time she made a claim because of a lighting strike.
MacDonald adds that when it comes to claiming for fridge or freezer content damage, that consumers should look for the best insurance policy.
“Always best to go with the high end service providers,” said MacDonald.
But claiming from insurers for general power outage damage is not so simple.
Gari Dombo, MD of Alexander Forbes Insurance said in a recent statement that power failures can damage the contents of fridges and freezers but added: “If it is a localised power problem you could move the food to somewhere else where it can be refrigerated…Most insurance policies provide some cover for deterioration of food but not of the loss of power is due to a deliberate switch off by authorities.”
Alternative power options
The question remains however, whether insurers will continue to pay out in the event that damages occur as a result of
Eskom’s outages or whether they will, in fact, close any such loop holes in their policies. Already, insurers are highlighting the importance of homeowners looking into alternative power sources in light of the fact that power outages are expected to remain.
Could it only be a matter of time before insurers force customers to install an alternative energy source to deal with blackouts before they insure them?
Certain caveats already exist. Alexander Forbes, for example, pays for surge damage if the cover option chosen includes full accidental damage. The damage must also be visible component damage and not just that a component has stopped working.
Criminals are taking advantage of the blackouts too by targeting homes experiencing load shedding.
However, insurers know that this happens and are informing clients to take extra precaution. Dombo recommends the use of battery backups which will support the alarm system for between six to twelve hours. The battery recharges automatically once the electricity resumes.
Dombo cautions that while some insurers will be sympathetic to alarm failure during a power outage you, as the customer, will have to demonstrate that all reasonable steps were taken to make sure your alarm is in working order for other insurers who are more stringent in their policy wording.
“Alexander Forbes Insurance looks at every case on its own merits. Alarm company records show a habit of alarming the alarm and alarm testing as well as proof that you have recently replaced your battery will influence insurer decisions.”
Dombo added that South Africans are in it for the long haul when it comes to power cuts and that consumers should look at alternative power options for when there is load shedding in order to keep the lights on.
“These may include items such as invertors, which allow for an uninterrupted supply of power for six to eight hours. While generators successfully ensure geysers and fridges remain on, they are costly and noisy to run and distribute hazardous fumes,” said Dombo.
Dombo added that green alternatives such as wind turbines, solar geysers and solar electricity are off grid options which should be considered so that consumers are not caught off guard when the power goes off.
The cost of alternatives
However, generators can cost around R6k and upwards while inverter solutions start from around R100k, according to Aon, South Africa.
But if you purchase a generator your problems may not end there as they are now being stolen out of gardens and solar panels are being stolen off rooftops. Again insurers appear to be distancing themselves in their policy wording.
“It is essential that homeowners check their sum insured is sufficient to cover the replacement of the building along with any new fixtures and fittings,” says Mandy Barrett of insurance brokerage and risk advisors, Aon South Africa.
What’s more, you can’t simply install these energy saving items yourself or get any person to help you. The work needs to be done by a certified professional, especially for insurance purposes.
“You may unwittingly open yourself up to insurance problems that could arise out of using dubious electrical contractors if you don’t know what to look for. If there is an instance where corners are cut or an alternative energy solution is incorrectly wired into your home, you may run the risk of a loss occurring, perhaps even a major one,” warns Barrett.
*OutSurance was approached for comment but had not replied at the time of publication.
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