If the power’s gone out, your electricity provider can’t guarantee when it will come on again, and you’ve got a business to run, or food spoiling in the fridge - what can you do? Tim Grafton, chief executive of the Insurance Council of New Zealand, explains.

Who to call

If you’ve been hit by the recent power cuts and need to make a claim, or if you aren’t sure what entitlements you have under your insurance policy, speak to your broker or insurance company. If you’re in the middle of a power cut but haven’t suffered a loss, your first port of call for enquiries should be your electricity provider.

What about spoiled food or damaged appliances?

If you’re an individual with contents insurance, you may be eligible under your policy to claim for food spoiled or appliances damaged as a result of a power cut. If the power loss means your home is uninhabitable, you may also be entitled to an emergency accommodation benefit.

Your insurance policy should lay this out for you, but if you’re uncertain, it’s always best to contact your insurance provider.

Take photos

As with anything you need to claim for, take plenty of photos of the damage. Your insurer will need these to assess your claim. The more complete the photo documentation you can provide, the more accurately your insurer can assess your claim.

What if it’s affected your business?

If you’re a business, large or small, there’s a raft of entitlements you may have, depending on the type(s) of policies you own. If the power cut has damaged equipment, you may be entitled under a material damage policy to claim for repair or replacement.

If the power cut has prevented your business from operating, a business interruption policy may entitle you to compensation for loss of gross profit.

If refrigerated goods are an essential part of your business, you should look at taking out a refrigerated stock deterioration policy to cover items such as food or pharmaceuticals, in case they’re damaged by temperature variation.

It pays to consider risk versus cost, too, when looking at insurance policies. If power is critical to your business, you may want to pay more to be covered for instantaneous power loss. If power is less critical, you may be comfortable paying a lower premium and being covered only once power has been out for, say, 24 or 48 hours.

Back-up options

Unfortunately, insurance cannot restore power, no matter what kind of policy you have. If electricity is critical to your home or business, for whatever reason, it’s best to look at back-up options, in case a power cut like the recent ones in Auckland happens. You could buy a generator, or some people may look at having backup business sites, although it’s hard to predict exactly where will be affected by any power outage.

First published 19 April 2018

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