What Is Broad Form Coverage and What Does It Cover?

Insurance policies protect individuals and businesses from unexpected financial losses. “Broad form coverage” represents a specific level of protection, extending beyond basic safeguards. This coverage shields policyholders against a wider array of defined risks than more limited insurance options. It offers enhanced security by covering a more comprehensive list of occurrences.

Understanding Broad Form Coverage

Broad form coverage is not a standalone policy but a designation of protection within various insurance types, such as homeowners, renters, or commercial property policies. It is an intermediate coverage option, offering more protection than basic or named perils.

Broad form coverage expands protected events but operates on a “named perils” basis. For a loss to be covered, the specific cause must be explicitly listed within the policy document. If a peril is not itemized, resulting damage is not eligible for compensation.

Perils Typically Covered

Broad form coverage covers a wider range of unexpected events. It includes damage from falling objects, like tree limbs, and losses from the weight of ice, snow, or sleet.

Policies cover sudden and accidental tearing, cracking, burning, or bulging of heating, air conditioning, or sprinkler systems. Accidental discharge or overflow of water or steam from plumbing, heating, or air conditioning systems is also included.

Damage from artificially generated electrical current, such as power surges, is included. Freezing of plumbing, heating, or air conditioning systems, which can lead to burst pipes, is another standard inclusion. Broad form policies also cover collapse, defined as an abrupt falling down or caving in of a building or part of a building.

Broad Form Compared to Other Coverage Types

Broad form coverage is best understood by comparing it to basic and special form property insurance. Basic form is the most limited, covering only named perils like fire, lightning, windstorm, hail, explosion, smoke, vandalism, and theft. Unlisted perils are not covered.

Broad form expands on this basic list with a wider array of named perils. Though still requiring named perils, this expanded list significantly increases protection over basic policies.

Special form coverage, also known as open perils or all-risk, offers the broadest protection. Unlike named perils policies, special form covers all perils unless specifically excluded. Common exclusions include flood, earthquake, war, nuclear hazard, neglect, and intentional loss. This distinction—a specific list versus all perils unless excluded—defines the increasing scope from basic to broad to special forms.

Key Policy Elements

Understanding specific policy components is important, even with broad form coverage. All policies, including broad form, contain specific exclusions for events or types of damage not covered. Exclusions include flood and earthquake damage, unless added by endorsement. Wear and tear, neglect, or pest infestations are also excluded.

Broad form policies may limit coverage for high-value items like jewelry, fine art, or cash. These limitations cap payouts for covered losses to these items, requiring additional endorsements or separate policies for full protection. Reviewing these limitations ensures adequate coverage.

A deductible is another standard element, representing the amount the policyholder pays out of pocket before coverage applies. For example, if a policy has a $1,000 deductible and a covered loss totals $5,000, the policyholder pays the first $1,000, and the insurer pays the remaining $4,000. Carefully reading the full policy document, including any endorsements, is important.