Does Homeowners Insurance Cover Power Surge Damage?

Does Homeowners Insurance Cover Power Surge Damage?

A power surge can do a significant amount of damage to your home’s appliances and electronics. Your home insurance policy may cover some of the damage it causes, depending on what happened and why it occurred. Here is what you should know about how your home insurance works and when it can be useful after a power surge.

Will Homeowners Insurance Coverage Apply to Damaged Appliances After a Lightning Strike?

Imagine what could happen in your home. Lightning strikes during a storm. The electricity runs through your home, overloading your electrical systems. It goes right to the appliances in your home, instantly shorting them out. While a fire did not occur, your appliances cannot be repaired. In this type of situation, will homeowners insurance cover your losses?

In this situation, it is likely that your home insurance policy will provide financial compensation to you for the losses you have. In this situation, your home insurance personal property coverage kicks in to help replace the damage to your appliances. This can help you to restore your home back to good working order. It can also cover your electronics if the same type of instances occurs.

These insurance policies do have limits, though. Take the time to learn about your personal property coverage and find out what you can expect in terms of protection. In most situations, there is a per item and a total loss limit. Most policies will not replace electronics or appliances that are very high value at their purchase price. However, if you own very valuable electronics or appliances like this, be sure to add them to your policy as a separate claim. This can help to improve your coverage and minimize your losses.

In a situation like this, contact your home insurance agent right away. Discuss what occurred. Then, document the incident thoroughly. Your insurance company will pay out at the terms of your policy. This may be replacement cost coverage or, more commonly, actual value. In actual value, the policy pays you based on the value of your lost items right before they were damaged. This takes into account depreciation in value. Replacement value provides enough to cover the replacement of your appliances at today’s rates.

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Will Homeowners Insurance Cover a Power Surge Resulting from Overuse of an Outlet?

There are few situations in which a power surge is covered by home insurance policies. The key to remember here is that it is more common for the insurance company to deny claims that are not related to a lightning strike. For example, if you use too many plugs or pull too much power from your electrical outlets, and this causes a surge, your home is not likely to have coverage for the damage. It only applies in situations where the damage is unavoidable and accidental.

Using a Home Surge Protector Can Help

One way to minimize this risk is to use a home surge protector. This is a specific type of device that stops a high voltage pull from your electrical outlet. It can help to prevent the most common causes of a power surge. Choose a high-quality, well-rated plan to help you to do this. It can provide you with the best level of protection across the board. It can also help to minimize the risk of having to pay out of pocket for an accident involving a power surge.

What Does Home Insurance Cover After a Power Surge?

In the event of a power surge, your home insurance policy will help to cover the losses associated just with the surge and only if it is due to a covered peril, such as a lightning strike. Keep in mind that this may not apply in all situations. For example, if a power surge occurs, it may damage your home’s appliances, electrical panel, and other electrical systems in the home. Your policy will pay to repair those costs but it is not likely to pay for the losses associated with upgrading your system to meet the new needs you have.

Improving Your Insurance Coverage to Provide More Protection

Not all home insurance policies offer power surge protection. Some even exclude it outright. If your policy does not include this coverage, work with your home insurance agent to improve your coverage. Insurance coverage for lightning strikes, at the least, is important to most people as this is a type of risk that occur to anyone, anywhere. Though a surge protector can limit its occurrence, having an insurance policy to cover your losses is typically beneficial.

Also, speak to your home insurance agent about the amount of payout. Some people may benefit from having a replacement value policy and not actual value especially if you own cutting edge technology that is expensive to replace.

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