Spike in insurance claims as burglaries increase

This year’s energy crisis has been described as the worst load shedding in history. earlier this year, bloomberg reported that in April 2022 alone there had already been a reduction of 1 054 gigawatt-hours for the whole of 2021, while 2 521 reductions were made. And as of July 1, Eskom had cut 2,276 gigawatt-hours of electricity in 2022.

As a result, more and more South Africans are falling prey to the effects of load shedding at home, in the business sector and on the streets.

According to insurance companies, there has been a significant increase in claims for damages to sensitive electronics due to power surges caused by load shedding – news 24 Report.

Read also: Eskom nears record for worst load shedding year…only six months

increase in insurance claims

In the first half of 2022, Santon reported a 60% increase in claims, while DialDirect Insurance found that there were more thefts and accidents due to power outages.

With Eskom implementing Phase 5 this week (after implementing Phase 6 over the weekend), Santam’s chief of claims, Fanus Coetzee, said the increase in claims related to the growth in the company’s personal and commercial insurance portfolio.

Precious Naduli, Head of Technical Marketing, Discovery Insure said that the company’s short-term insurance business also saw a growth of over 50%.

“In June 2022, the period during which load shedding had accelerated, we received an average of 300 claims a week in the individual line business,” she said.

Load shedding is causing more accidents and burglaries

According to DialDirect, load shedding resulted in a 3.2% increase in thefts and 5.2% in vehicle accidents during the week. However, these figures are more than double.

“The dangerous consequences of load shedding occur when street lights and traffic lights are turned off at night,” said Annelie Retiff, head of DialDirect Insurance.

“When there is load shedding, traffic lights are switched off, and this leads to vehicular accidents. And when the power is turned off for a long time, the protection systems fail. Those unavoidable reasons lead to a rise in thefts,” Santam said.

Are customers penalized for burglary during load shedding?

“Most insurance policies state in their contracts that the home alarm must be activated at all times when the home is empty,” Retiff said.

So, what happens during load shedding? Are customers penalized if a break-in occurs during a power cut?

OUTsurance says no. The insurance company said that to help cover the premium, it has now implemented more additional charges for power surge-related claims.

According to Discovery, the insurer gives its customers the option to buy a higher amount of power surge cover for a small additional premium.

Santam, on the other hand, does not cover load shedding under its insurance contract. However, sensitive electronics for customers are covered under building and household contents insurance.

Read also: ‘Total blackout’: what will it mean for South Africa?

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