Does Homeowners Insurance Cover a Power Surge?
Published: November 2015
Electricity makes our appliances work. But a sudden spike in electricity — a power surge — can damage or destroy appliances and gadgets in the blink of an eye. And with more electronics in our homes than ever, that can be costly.
Power surges may be caused by two main events, according to the National Institute of Standards and Technology:
- Lightning can cause a power surge when it strikes your home, power lines or telephone wires.
- Switching surges are caused by sudden changes in electrical loads, either within your home, or because of power company operations.
Insurance coverage for losses resulting from power surges may depend on your policy, as well as how the power surge happened.
Personal Property Coverage
Homeowners insurance policies typically include several kinds of coverage. A key coverage is personal property coverage, which may help to protect your belongings in your home from losses resulting from covered perils. If a power surge damages or destroys your electronics, personal property coverage in your homeowners insurance may help to protect you — up to the limits
in your policy. However, coverage can vary depending on your individual policy, so it's important to read your policy carefully or ask your insurance agent.
We think of the chances of being struck by lightning as small, but lighting caused about $30 million in personal property losses in 2014, according to the Insurance Information Institute (III).
The III explains that some — but not all — homeowners policies cover power surges that occur when lightning strikes your home directly. It's important to check your policy, or speak to your insurance agent, to determine whether you have coverage for direct lightning strikes.
Most homeowners policies include some protection against sudden, accidental damage from man-made electricity, according to the III. Some insurers don't offer coverage for tubes, transistors, and other electronic components — the parts that make electronics work. Check your policy to learn what may and may not be covered in your home.
For example, if an appliance overheats and melts due to a power surge, your homeowners insurance may help protect you against that loss. Homeowners insurance may also provide protection if a power surge damages the electronic parts of your belongings. Again, be sure to read your policy to learn about the specific protections it provides.
Planning Ahead and Surge Protection
It's important to have a proper inventory of your personal items in case you ever need to make a claim. A detailed home inventory can help you decide whether you have enough insurance. It can also make it easier to make a claim, if you ever need to.
Finally, there are proactive things you can do to help protect your home. The III suggests installing a lightning protection system, and using surge protectors. In a storm, you might consider unplugging appliances, especially more sensitive electronic devices such as computers.
Of course, no one wants their electronics or appliance to get fried in a power surge. But having protections in place — and understanding the terms and limits of your coverage — can bring you some peace of mind, just in case.