Are Power Outages Covered By Your Home Insurance?

A power black-out can blow out your fridge and freezer, meaning a lot of expired food and medicines – but is that enough to make a contents claim?

With all the power troubles South Australia has been having lately, along with climate change making wilder weather conditions increasingly standard, we’d hazard a guess that power outages are set to become a major headache for a number of Australians.

Power outages can cause all kinds of content headaches, including blowing out pricey appliances like your TV or fridge, so the pressing question is what your insurer will cover.

Can you make a contents insurance claim on damage or loss caused by a power outage?

Most home and contents insurers state that they will not cover loss or damage caused by power failures or power surges from your energy provider, but will cover loss or damage caused by lightning, including a power surge from a lightning strike.

So your claim will rest on whether or not the outage was caused by wild weather or a failure on your power provider’s part. Thankfully, power outages caused by weather are slightly more common than energy provider failures!

Some insurers specify a set of additional criteria which, if met, would scupper your claim. Non-covered claims can include:

  • Any claim where the Bureau of Meteorology has no record of lightning in your area at the time of the loss or damage.
  • Loss or damage without written confirmation from a qualified repairer saying lightning was the actual cause of the loss or damage.
  • Loss or damage caused by power failures or surges by your power provider (as mentioned above).

An interesting thing to note is that despite covering the replacement of spoiled food, some insurers won’t cover loss or damage to a fridge or freezer caused by spoiled food. So if the seals on your fridge or freezer break or the inside or outside becomes stained or damaged due to food spoilage, you’ll have to clean or replace that on your own.

How likely is a power outage caused by my provider?

Believe it or not, sometimes a power outage will be the cause of deliberate action on your provider’s part. Early in February this year, around 60,000 households in South Australia were left without power after SA Power Networks deliberately turned the lights off under orders from the Australian Energy Market Operator.

 

Although the order was rescinded and power was restored only 45 minutes later, the ordeal was a good example of a situation where a power provider was the reason for a power outage. Some residents may have been looking at food spoilage, and the initial outage may have caused appliance blowouts in some households. Sadly, as we’ve mentioned, none of those losses or damage would be covered by insurance.

All of this being said, different insurers have different rules regarding damages and losses caused by lightning or a power outage. Be sure to check your home and contents insurance product disclosure statement (PDS) to know exactly where you stand and what you’re covered for.

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