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With consumers queueing up to go off-grid, there is one important thing that consumers should consider as well: how it affects your insurance.
With the increase in rolling blackouts, insurance companies are noticing an increase in claims for fire damage and if your equipment is not properly insured, you might have to pay for the damage from your own pocket.
“While we have come to accept the unfortunate reality of power supply interruptions, reports suggest that load shedding stage 2 or 3 could be guaranteed for the next two years. In this scenario, we are in for a bumpy ride,” says Lizo Mnguni, spokesperson for Old Mutual Insure.
He says many people decided to invest in alternative power supplies such as inverters, generators, UPS batteries and even solar power to keep the lights on, and solar has now become even more attractive given government’s recent introduction of a solar panel tax incentive for individuals.
“Many financial institutions offer finance for solar power, which makes it more easily accessible. If policyholders install such a system, we require that they inform us. The sum insured must be adequate, but many policyholders do not insure them at the correct value, which means that if they experience a loss, they would not be able to replace it with a new one because the insurer will pay out a lower amount.”
Mnguni says you must insure a movable power solution under the contents section of a policy and fixed or non-movable solutions, such as a UPS, under the building policy.
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“We notice a trend of an increase in fire claims, likely from either heat emanating from the system, or incorrect installations. While the policyholder is entitled to use an installer of their choice, consumers must ensure that the installer has experience and qualifications.”
Old Mutual recommends that all policyholders must do their homework and research before hiring an installer.
“Our requirement is that, according to the regulations, electrical installations must be done by a qualified electrician, who must issue a Certificate of Compliance.”
He also says consumers must not use their insurance policies like a maintenance contract.
“You may have both household contents and buildings cover under your insurance policy, but this does not mean that you would be able to claim for solar panels that no longer store as much energy as they previously did when they were brand new, given a demise in batteries.”
Mnguni says this would be classed as ‘wear and tear’ and will not qualify as an insured loss event. He also warns that it is important to remember if you have solar panels fitted and you live in an area where there is a risk of hail, your need for insurance may be greater than what you previously considered it to be.
“If you live in an area prone to hailstorms, check if you have adequate buildings insurance cover in place, as any loss event to your solar panels would likely be covered by this policy. If you had no cover in place previously, now is the time to consider it.”
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Mnguni has these tips for policyholders who are considering investing in solar panels:
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