By Herman Liebenberg – General Manager Insure City Insurance Brokers (Pty) Ltd

How do alternative power solutions affect your insurance policy as a member of a community scheme (Body Corporate/homeowners association)?

With the numerous options available to consumers regarding alternative power solutions, it is prudent to focus on the most commonly used solutions:

• Solar panels, inverter, and battery system (full system)
• Inverter and battery system only (backup system)

Solar panels, inverter, and battery system (full system)

As the name infers, this system is comprised of three parts, namely:

• Solar panels, which are installed on rooftops for the best exposure to sunlight.
• Inverter, which converts the alternating current (AC) to direct current (DC) and vice versa.
• The batteries, which store power for utilisation if/when required.  This means the system draws power from the sun to charge the batteries during the day when the sun is out and uses that stored power when the sun sets.

These types of systems, depending on the size, are aimed more towards being grid-free, as opposed to being used only as an emergency power supply.

Inverter and battery system (backup system)

The same principles apply as with the solar panel system, with the only difference being the lack of solar panels. This means that your batteries are charged from the public supply of electricity when it is available.  Batteries are constantly topped up and kept at full charge until such time that the power fails.  The batteries and inverter will then run the power of your house for as long as the battery back-up lasts. 

How this affects you as a Body Corporate Member

Solar panels, inverter, and battery system

Body Corporates have a harder time with this from an insurance perspective, as there could be common property areas (roofs and high-rise rooftops) involved with the installation of solar panels.  The roof itself is common property and not an “exclusive use” area.  The installation of such panels would need approval from the trustees and, in some cases, even have “exclusive use” areas allocated to them.  Please consult with your trustees and managing agent in this regard.

If the trustees have approved your panels for installation, insurance for the solar panels would be added to the Body Corporate policy as an improvement to your unit.  This is subject to an additional monthly premium which will be levied to your unit as part of your portion of the insurance premium.  Kindly note that power surge and theft covers are limited under the Buildings Section per the limits stated on the policy schedule.

The inverter and batteries can also be specified as an All-Risk Item.  This will ensure full cover against power surge and theft cover along with all other insured perils.  Again, this is subject to an additional monthly premium which will be levied to your unit as part of your portion of the insurance premium.

You could also add the solar installation to your personal Household Contents insurance.  It is important to note these are specialised items and need to be insured correctly.

It should also be noted that premiums on All-Risk items are higher as the exposure of risk is higher.

Compliance:

It is important that all installations must adhere to the National Building Regulations, local authority statutory requirements, and manufacturer specifications.  This is also a general condition of an insurance policy.  It is therefore crucial to obtain a Certificate of Compliance for the installation of the system (electrical) and to ensure that the structure on which the solar will be installed is sufficient and able to carry the additional weight being added to the roof without compromising the integrity of the structure.

Please contact your Community Schemes broker for more information.