When it comes to natural damages and homeowners insurance, most people think of flooding, hail and water damage but what about power surges? Does your insurance cover that and what exactly is a power surge?
According to the National Institute of Standards and Technology, the standard amount of power delivered by an electrical outlet is 120 volts of AC power. When a surge occurs, the voltage will spike up for a millionth of a second but with enough power to destroy your appliances. Power surges may be caused by two different events –
- 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.
American households spend billions on electronics annually. The average household contains thousands of dollars of electrical conveniences like appliances and electronics, including televisions and computers. Limitations found in most standard forms of home insurance could leave you in the dark.
In many home insurance policies, this limitation only applies to personal property, not to “building property.” This means items that are considered part of your house, such as a built-in range, burglar alarm system or central heating/AC system are covered by your home insurance if bereft of life due to power surge.
However, this is not true for all home policies. Most standard home insurance policies can be modified to cover losses to property caused by electrical surge. If your current policy cannot be modified, consider asking your agent to shop for a policy that includes the coverage or can be modified to do so.
Installing surge protectors is a good defense against having an insurance battle after the fact. A good point-of-use surge protector many consumers use to power their PCs and other electronic equipment is inexpensive, usually costing between $10 and $20. But these devices have their limitations and tend to lose their effectiveness over time.
An alternative is a whole-house surge suppressor installed at the main service panel. Service panel surge suppressors are designed to deal with large power surges as they enter the property, reducing the impact on equipment down the line. These suppressors are more expensive – as much as $700 – and must be installed by a licensed electrician and inspected from time to time.
To learn more about best practices to protect against power surges, visit https://publications.usa.gov/pdfs/pdf1339.pdf