Santam Sees Major Decline in Power Surge Claims After Consumer Education Drive

South African insurer Santam has reported a remarkable 80% reduction in power surge-related insurance claims over the past year. This significant decrease, dropping from an average of 5,000 to just under 1,000 claims a month, is attributed to targeted consumer education efforts aimed at mitigating the risks associated with load shedding.

Power surges and dips, which can cause damage to electrical and electronic equipment, often occur as a result of the rotational power cuts implemented during load shedding periods. These incidents have posed a considerable risk to sensitive electronics, and in turn, have spiked insurance claims across the industry.

A noticeably contrasting trend was observed by Dialdirect, another player in the insurance market, which reported an 80% increase in power surge claims in 2022/2023 compared with the previous three years. This surge in claims went hand-in-hand with the escalated load shedding schedule which saw a 970% gigawatt-hours increase during the same timeframe.

In light of these developments, Attie Blaauw, Santam’s head of personal lines underwriting, emphasized the critical role of consumer education. He urged policyholders to review their insurance meticulously, be it home contents or electronic equipment cover, as protection against power surge damage varies depending on the insurance product. Blaauw noted that while load shedding incidents are not typically covered under insurance contracts, the consequential power surge damage generally is.

He spoke further on the subject, advising customers to not only make sure they had the appropriate cover but also to reassess their coverage limits regularly. This is particularly important to accommodate the acquisition of new electronic devices, with the aim of ensuring all items have the correct replacement value cover.

Santam's educational drive has evidently paid dividends when it comes to equipping consumers with the knowledge required to reduce their risk exposure. From advice on the use of surge protectors to the nuances of insurance coverage, consumers are now better prepared to handle the realities of persistent load shedding.

Amidst an era where power cuts remain a stark reality, the insurance industry's data reflects a clear message: active consumer engagement and education can have tangible benefits in reducing the financial impact of load shedding. Santam's strides in this domain set an example within the industry, offering a blueprint for how insurers can work alongside consumers to safeguard their possessions against unforeseen electrical anomalies.

As Santam continues to navigate the challenges of a power-constrained environment, the success story of their consumer education indicates an emergence of a more savvy, proactive insured populace. It shines a light on the broader imperative for preparedness and the shared responsibility in minimizing the repercussions of load shedding's unpredictable nature.