Will your home insurance cover damages from a power outage?

A power outage -- whether triggered by lightning, a storm rolling or some other cause -- can suddenly make homeowners realize how vital electricity is. The outage can not only leave homeowners in the dark, but can damage computer equipment, TVs and other electronic equipment.

Most homeowner's insurance policies cover losses from power interruptions caused by lightning, windstorms and other such weather, according to the Insurance Information Institute.

Roughly one-third of power outages are caused by lightning. The National Lightning Safety Institute reports that 3 percent to 4 percent of insurance claims are filed as a result of lightning. For homeowners, lightning was responsible for nearly $800 million in insured losses in 2009, with the average homeowner's claim totaling $4,296, according to the Insurance Information Institute.

home insurance power outage The most common homeowner's policy in the United States -- called Homeowners-3, or HO-3 -- provides broad coverage for disasters, or “perils,” such as lightning or tornadoes. The Insurance Information Institute recommends checking the dollar limits of insurance with your agent and making sure you’re comfortable with the amount of coverage for specific items.

Power outages and spoiled food

Food spoilage from a loss of power affecting a refrigerator or freezer isn’t regularly covered by homeowner's insurance policies, although sometimes power companies will reimburse customers for such losses.

Even if food spoilage is covered, it may not be worth paying the deductible. You'd have to have, say, $500 to $1,000 in spoiled food in the refrigerator for the deductible to pay off.

Coverage for spoiled food generally arises from an "on premises" power interruption, such as wind knocking down a tree onto your power meter. If power went out because of an "off premises" interruption and knocked out power to the entire block, for example, it's generally not covered by homeowner's insurance.

Some states make exceptions regarding spoiled food; if the power loss is caused by a break in a power line on or close to your property, you may be covered.

Taking precautions

Power surges or outages in homes are much rarer than at businesses. Nonetheless, it pays to exercise caution at home.

Damage from power interruptions often can be prevented or minimized simply by installing a surge protector that costs about $20, says Vishal Sapru, research manager for the energy and power unit of Frost & Sullivan. Computers, TVs, appliances and other electrical devices can be plugged into one surge protector, which shields them against damage from power surges.

Professional photographer Chris Nicholson of New York City knows firsthand how much damage can be caused by a power outage. Nicholson -- who has been shooting professional tennis for 16 years and has written a book on the topic -- was hit by a power outage a few years ago at his home and ended up losing his entire catalog of images from the 2005 U.S. Open. The images were stored on his computer’s hard drive.

Nicholson's insurance didn't cover any of the damage.

Nicholson and some computer experts spent three weeks trying to recover the data, and they managed to save 85 percent of it. But he still lost the 2005 U.S. Open photos and many others. Nicholson had backup drives before the power outage, but he didn’t back up often; the previous backup had been at least six months earlier.

“Now I run backups regularly,” Nicholson says. “I also now use a good auxiliary power unit that can handle my whole system -- important for the frequent brownouts experienced in New York City summers.”

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