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Friday / 24 May 2024
HomeFeaturesCar insurance during a total blackout – What you need to know

Car insurance during a total blackout – What you need to know

Load-shedding in South Africa is at an all-time high and fears of a nationwide blackout have never been more present.

In the face of persistent power cuts, certain insurers have removed cover related to grid failure, which can be classified as an “interruption of the electricity supply which affects an entire municipality, province, or country,” said Ernest North, co-founder of Naked Insurance.

“Most insurers have recently introduced an exclusion for grid failure (i.e. you’re not covered) because of the high risk of significant power surges once the grid is restored,” said North.

This is because surges could cause harm to appliances and property on an uninsurable scale, hence, it has become “reasonable to expect” people to plug out their devices and electric cars to avoid surge damage when the power comes back on.

Grid failure and car insurance

The main factor that determines whether you are covered with most claim types, not just automotive, is whether the grid failure/power surge was the trigger that caused the losses or damages.

“If the grid failure (or the power surge when it is restored) is the root cause of the damage, you’re not covered,” said North. “However, if the power failure only increases the chances of the loss, you’re still covered.”

In the event that your car is stolen during a total blackout, you won’t be covered if the blackout was the primary cause of the theft, but if the blackout only played a role in the theft, you’re still covered.

“A client is required to take reasonable steps to avoid or minimise loss. Failing to do so would invalidate your insurance claim,” said North.

“For example, it is necessary to take precautions to ensure your gate is locked manually if it stopped working during a grid failure.”

If you were involved in a car crash during a blackout, a similar principle applies.

“If you are in a car accident because the traffic lights are out, you will still be covered provided everything else checks out with your claim. In such an instance, the direct cause of damage is a vehicle accident, not grid failure,” said North.

He also said Naked has experienced an uptick in load-shedding-related claims in 2023 mainly due to traffic lights being out and roads plunged into darkness because of the non-stop electricity interruptions.

While the grid failure clause is mostly designed for non-motor policies, North highlighted the following examples where it may still apply:

  • Power surge as a result of grid failure damaging electric vehicles that are plugged in
  • Power surge as a result of grid failure that starts a fire in the garage of the house where vehicles are parked
  • If a power surge after a grid failure causes your gate to swing wide open and it collides with and damages your car
  • Where an insurer has a requirement that vehicles must be parked behind locked gates or in a locked garage overnight and thieves take the opportunity to steal during the grid failure

These comments and insights from Naked Insurance echo that of King Price, which notes that certain exclusions on an insurance policy may apply in the event of vehicle damages or theft during a blackout, depending on the circumstances of the event.

“While loss and damage due to ‘blackout’ are specifically excluded from our cover, we’d have to determine whether a loss would still have happened if there hadn’t been a blackout at the time of the incident,” said King Price.

“We’d only be able to make a decision on the claim when we’re sure about the contributing causes.”

King Price recommends that all motorists get familiar with their policy’s terms and conditions and find out what the insurer covers when there is no electricity. The company also said terminology is an important aspect, as terms such as “grid interruption” could mean the same thing as “total blackout”, depending on the insurer.

King Price further said a far more frequent occurrence that puts the safety of motorists at risk during load-shedding is that of civilians taking over the directing of traffic when the lights are out.

“With load-shedding an everyday occurrence and traffic lights being out of action for large portions of the day, it’s become commonplace for untrained and unofficial people to take control of intersections and direct the traffic,” said King Price.

“Our clients are still covered for loss and damage that may arise at informally-controlled intersections, provided that they were acting with the necessary due care and precaution at the time of the incident.”

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