Electric fence insurance claim warning in South Africa

Insurance companies may reject a home burglary claim if the property’s electric fence was broken or not up to standard, and if you forgot to arm your alarm before leaving home.

While insurance companies said claims are evaluated individually, several have told MyBroadband that non-functional or non-compliant electric fences and alarm systems would negatively impact payouts.

Electric fence expert Douglas Deerans from Gido Group also recently told MyBroadband that they recently performed an assessment where an insurance company rejected a claim involving damage to an electric fence.

He said the fence did not have a certificate of compliance or a surge protector installed, which led to the insurance company repudiating the claim.

Deerans said that while having a certificate is important, many insurance companies will investigate a claim further to ensure an electric fence installation is up to standard — certificate or not.

When a customer cannot produce a certificate and their electric fence installation is not up to standard, there is a good chance their claims will be rejected.

However, poorly installed or otherwise non-compliant electric fences could have far more severe consequences when claiming for stolen household contents, or for property owners who find themselves at the wrong end of a personal liability claim and are facing criminal charges.

MyBroadband asked several insurance companies for their input on the subject, and four responded — Hollard, OutSurance, Discovery Insure, and Telesure’s Auto & General.

Discovery Insure technical marketing head Precious Nduli said their minimum security requirements do not include an electric fence.

Where they require clients to have an alarm, she said it is essential to ensure it has sufficient backup power.

OutSurance chief client relations officer Natasha Kawulesar said they couldn’t directly answer questions about whether they would reject claims where the electric fence was non-compliant or the alarm system was offline due to a power outage.

“Our decision is based on the individual merits and unique circumstances relating to each claim,” said Kawulesar.

“Where clients are aware that the battery life of their alarm system may not survive the scheduled load-shedding period, it is advisable that they have backup batteries in place,” she said.

Kawulesar explained that security measures are a factor in determining the insurance premium.

“Where there is a risk that they may not operate as designed, clients should let their insurer know,” she advised.

“Removing them as security measures may impact the premium and in certain instances where the security devices are contingent on cover being provided, may result in the insurer being unable to provide cover,” Kawulesar continued.

“It is best to always provide your insurer with full information.”

Auto & General marketing head Johanni Jennings also explained that clients should ensure they fully understand their conditions of cover.

“Most insurance policies stipulate in their contracts that the security alarm must be activated and armed at all times when premises are unoccupied,” Jennings said.

“If your property is burgled during a power outage, then, theoretically, your theft-related cover would be moot.”

However, she added that at Auto & General they believe a power outage is beyond the control of customers and they should not be penalised for it.

“As such, each claim will be assessed on its own merits. The good news is that alarm systems are, in most cases, fitted with backup batteries which typically last long enough to keep the alarm armed during scheduled and unscheduled outages,” said Jennings.

“We urge homeowners to ensure that these backup batteries, which deteriorate over time, are replaced timeously to ensure that the alarm remains active.”

Hollard’s head of personal lines product and underwriting, Delouise Marais, also explained that the minimum requirements for theft cover will depend on the specific policy and used properties in high-security estates as an example.

“Properties in high-security typically do not have burglar bars, security gates, or linked alarms,” Marais explained.

“In such cases, a high perimeter wall with electric fencing, connected to either a 24-hour armed-response service or the guardhouse, is required.”

If you become aware that any of these requirements are not met, you must inform the insurer immediately.

“The insurer may suspend theft cover or apply new terms and conditions until compliance is achieved,” she said.

“Each claim is reviewed on its own merit should a claim occur when the installation was non-compliant.”

She added that where an alarm is a minimum requirement for theft cover, it is crucial to test it with the alarm company regularly.

“Considering the additional strain load-shedding puts on the battery, it’s also advisable to have an extra backup battery,” said Marais.

Regarding whether it is good advice for clients to ask insurers not to make their cover contingent on a functioning electric fence or alarm, her answer was nuanced.

“The minimum requirements for theft cover varies,” she reiterated.

Marais said that if insurers only need burglar bars and security gates, the client may not want to have an additional alarm warranty.

“The client won’t get extra discounts for better security, but also won’t have to worry about setting the alarm when leaving home or making sure it’s always working,” she said.

“Similarly, an electric fence might not be necessary if the client already has sufficient security measures in place.”