Does House Insurance Cover Electrical Faults?

Home insurance serves as a financial safeguard for homeowners, providing protection against unforeseen events that can cause damage to their property. This coverage extends to the physical structure of the home, other structures on the property, and personal possessions within the dwelling.

Understanding Standard Home Insurance Coverage

Standard home insurance policies operate on the principle of “perils,” specific events or causes of loss. Policies generally fall into two main categories: “named perils” and “open perils” (also known as “all-risk” or “special form”). A named peril policy covers only the events explicitly listed in the policy document, such as fire or theft. Conversely, an open peril policy provides coverage for any cause of loss unless it is specifically excluded.

The most common type of homeowners insurance policy is the HO-3, or “Special Form,” which typically covers the dwelling and other structures on an open perils basis. Personal property under an HO-3 policy, however, is usually covered on a named perils basis. An HO-5, or “Comprehensive Form,” offers broader coverage, often extending open perils coverage to personal property as well, making it a more extensive policy but generally at a higher premium.

Electrical Faults Typically Covered

Home insurance policies generally cover damage resulting from electrical faults when the cause is sudden and accidental. For instance, damage caused by lightning strikes is a commonly covered peril. This coverage can extend to structural damage to the home, damage to other structures, and personal property affected by the lightning strike, including fires and power surges.

Power surges, particularly those caused by external factors like a lightning strike or issues with the local electric company, are often covered. This includes damage to appliances, electronics, and the home’s internal wiring. Fires originating from an electrical fault, such as those caused by overloaded circuits or malfunctioning appliances, are also typically covered by standard policies, provided negligence is not a factor.

Electrical Faults Usually Not Covered

Many electrical faults and associated damage are typically excluded from standard home insurance policies. Damage resulting from general wear and tear or gradual deterioration of electrical systems is usually not covered. Insurance policies are designed for sudden, accidental losses, not for the costs associated with expected aging or maintenance of a home’s components. For example, if old wiring fails due to age, the cost of repair or replacement is generally the homeowner’s responsibility.

Damage caused by a homeowner’s failure to maintain their electrical system or neglect of known issues is also frequently excluded. This includes ignoring obvious signs of electrical problems, such as flickering lights or discolored outlets, which can lead to a more significant incident. Issues arising from faulty workmanship, improper installation, or unpermitted electrical work by unqualified individuals typically void coverage for related damages. Insurers expect electrical installations to meet local building codes and be completed by licensed professionals.

Steps After an Electrical Incident

After an electrical incident causing damage, a homeowner should prioritize safety by securing the area and evacuating if necessary. After addressing safety concerns, document the damage thoroughly. Take numerous clear photos and videos from various angles, including wide shots of entire rooms and close-ups of specific damaged items.

Creating a detailed list of all damaged items, including descriptions and any visible serial numbers, is advisable. Homeowners should contact their insurance provider promptly to report the incident and initiate the claims process. Also, take reasonable steps to prevent further damage to the property, such as covering a damaged roof with a tarp or shutting off a leaky pipe, as this is often a requirement of insurance policies.