It’s a reality of life in South Africa – we have to accept that being without a reliable, 24/7 electricity supply is part of our everyday existence and it may be this way for a while. However, as a nation we are resilient and resourceful, and known for ‘making a plan’. Households and businesses that can afford to do so are using generators, inverters and UPS (Uninterrupted Power Supply) batteries, and installing solar power systems (increasingly popular since the introduction of a solar panel tax incentive) to help keep our lives as normal as possible. It is vital that your insurance cover is keeping up with these changes, and is 100% accurate to ensure that you are paid out in the event of a claim. South Africans need to stay fully informed when changing their lifestyle to accommodate ongoing load shedding and the spectre of a grid failure. In addition to the factors below, it is important for insured individuals to read the latest policy wordings and policy schedules to ensure they know what their cover protects.

UNDERSTANDING THE TERMINOLOGY

The difference between the terms ‘load shedding’, ‘load reduction’ and ‘grid failure’ is a question of planning, control and intent. Both load shedding and load reduction are intentional controlled interruptions of the electricity supply in a limited area, usually initiated by either Eskom or a municipality for various reasons.

Grid failure or grid collapse is a total or partial interruption, interference, suspension or failure in the electrical supply from national, regional or private suppliers.

PRACTICAL ADVICE FOR CONSUMERS

Here are some useful insights and guidelines:

Gas ovens

Use a qualified (and recommended) professional who will not only do a good job but will provide certification for a gas installation. A Gas CoC or Certificate of Compliance is required by your insurer for any permanent gas installation.

Solar panels

Because of the current demand for solar power, there are lots of people offering a service, so do your homework to ensure that you don’t add your complaint to the more than 200 complaints about solar service providers sent to the Consumer Goods and Services Ombud (CGS) during the past twelve months. The issues raised include extended installation times, goods not being delivered, poor service and shoddy installations, and lack of compliance certificates. To make matters worse, over 50% of suppliers named by complainants refused to assist the Ombud during investigations into these complaints/issues raised.

To protect yourself and what is going to be a sizeable investment:

• Decide what your energy requirements are and what budget you have to spend (considering the abovementioned tax rebate). Then explore the various financing options available, such as assistance offered by banks, rent-to-own and equipment-purchase packages.
• Research and check the references of reputable companies with skilled and trustworthy staff (these are people who will be gaining access to your home or business while they work).
• Get at least three quotations from these shortlisted companies, and ensure that they provide you with details of pricing, the system brand name and model, size/capacity and the estimated energy production, which must be compatible with your pre-determined needs.
• When you have selected a company, agree on an installation date and schedule and put this in writing. Remember that, as with gas installations, all electrical installations must be done by a qualified electrician, who must issue a Certificate of Compliance.
• Ensure that you get warranties for both the panels AND the installation work.
• Consider installing a generator or inverter as back-up to keep the solar panel system batteries charged during extended periods when there is no sunshine. Like the battery, solar panels should be compatible with the rating of the inverter. For example, a 12V solar panel should be paired with a 12V inverter and a 24V solar panel should be used with a 24V inverter.
• Finally – ensure that you add this to your insurance cover!

Generator versus inverter

The main factors when choosing between a petrol-powered generator versus a power inverter that converts battery power depends on your ability to tolerate a generator’s noise and petrol fumes, operating efficiency, and the device’s ability to effectively power up your appliances. Also, a generator needs an ongoing supply of fuel (which has to be safely stored) so consider initial outlay costs versus running costs. Ask an expert to assist with your decision.

Understanding the different battery choices

Batteries are an essential element of off-grid solar systems for backup power storage on rainy/cloudy days or at night. There is a choice: lead acid, gel and lithium-based (lithium-ion phosphate or lithium-titanate).

Lead-acid batteries are limited in how much charge current they can handle, and they may overheat. Also, the charge rate becomes significantly slower as the battery approaches full capacity.

Gel batteries have a usage lifespan of 3000 times deep recycle. They are significantly cheaper than lithium batteries.

Lithium batteries are more efficient, as they store more power and charge twice as fast as traditional batteries. This could mean that fewer solar panels are required, along with less battery capacity and a smaller backup generator. While lithium-based cells have high protections for temperature, short-circuiting and over/under charging, they have to be managed to ensure that the batteries are not damaged or aged, as this poses a risk of the battery catching fire and/or exploding.

In summary: lead-acid and gel batteries are generally used for backup (in the event of grid failure and during load shedding) as they have significantly less lifespan than lithium batteries, so using them regularly will require that you replace them sooner and more often. Generally, the rate at which the battery is charged/discharged will also influence its lifetime.

Keeping the lights on

Choosing between LED lights and candles is easy. LED lights and rechargeable torches are by far the safest, most reliable option. There is an increase in opportunistic crime at night during periods when there is no power, so look at installing solar-powered security lights.

Ensuing that your assets are covered

It is vital, as with any asset, to insure your load shedding survival equipment such as inverters, gas stoves and solar systems – and at the appropriate current replacement value. This means that in the event of a loss and a resulting claim, they can be replaced with similar/equal equipment.

Note that fixed or non-movable equipment such as UPS batteries must be insured under the homeowners building policy, while a movable power solution such as an inverter should be covered under the household contents section of a policy.

Solar panels are likely to be a permanent fixture and therefore will be covered in the buildings section of the policy. If you plan to take the panels with you should you move premises/home, cover will need to be provided by the household contents section of the policy. Ask your Safire-approved broker for guidance.

Hail damage to solar panels can be costly, so ensure that this is covered by your policy.

Remember that normal wear and tear, as with a vehicle and buildings, is not covered as you are considered to be responsible for taking care of the maintenance and upkeep of your property, not your insurer.

Understanding the risks

When a period of load shedding ends and power is restored, the resulting power surge may cause damage or destroy appliances and/or electrical equipment.

There is also an increasing trend of criminals stealing solar panels, both to resell on the black market or for the scrap value.

Certain equipment (including inverters and generators) should not be operated in enclosed areas such as a garage. There has been an increase in reported fire claims for equipment that is either installed incorrectly or in an unsuitable (enclosed/covered) location. Health risks from generator fumes and noise should also be considered.

Insurance may not apply should the grid fail

The South African Special Risks Insurance Association (Sasria), a public entity, has stated that “Sasria does not cover consequential loss as a result of a severe level of load shedding or complete blackout.” Similarly, many reinsurers and insurers are excluding insurance for total collapse of the national electricity grid.

The state insurer Sasria provides cover for damage resulting from politically motivated malicious acts, riots, strikes, terrorism and public disorder. After the July 2021 unrest, Sasria paid over R24-billion in claims, and the treasury had to add a further R22-billion to cover the costs. Should the grid collapse be caused through sabotage or political activity (terrorism), only then would there be a case for Sasria to assist. But for now, according to a Sasria spokesperson, “After the July riot claims, Sasria does not yet have the capacity to include other categories of disasters.”

In closing – know what your policy says

It is essential that policyholders stay informed about the details of their cover. Policy wordings may change over time via endorsements that give details of extensions and exclusions (optional and included). Warranties may also change the exact nature of the cover. Make sure that you are familiar with the details of what type of losses you are insured for and, where you feel there are gaps in your cover, make provision to supplement your cover with relevant power-surge protection etc, should this be available. Your Safire-approved broker will be able to assist you so that you are comfortable with the details of your policy.

Source: Safire