Severe storms caused a tree to crash near their house where the power line worked its magic, taking out their electricity.
They finally got their power restored, but it wasn’t until the following week that Sue discovered her deep freeze had malfunctioned, not turning back on after the power was restored, and causing her well-stocked food cache to completely spoil.
In this scenario, Gary and Sue had damage that was caused on their property by a covered peril, thus making it possible to use their homeowners insurance policy to step in and cover around $500 of their loss.
Any loss beyond that may not be covered, and they did have to pay a deductible to take advantage of that reimbursement.
Valerie lives in a nice home near the Bay Area.
After taking a short vacation to visit family in Utah, she returned home to discover the power company had shut down temporarily to prevent wildfires during a period of high winds.
Everything seemed in order when she returned from her trip, but the same thing happened to her freezer during the power outage. It had malfunctioned just like Sue’s, and she didn’t discover the damage until it was too late.
She called her insurance agent, only to find out that her homeowners policy would not cover damage caused by a power failure that did not originate on her property.
The power company refused to compensate for any losses, so Valerie was resigned to replacing her food stash as she could afford to.
Business owners insurance:
Businesses have the potential losses on a much higher scale, but insurance coverage works much the same way.
As a business owner, you can purchase business interruption insurance for times when your company shuts down due to an unforeseen crisis.
It’s a lifesaver when you need to continue paying your employees and drawing a salary after a catastrophe causes your business to halt temporarily.
But if your lights are out, and there’s no physical damage to your actual structure or machinery, you face paying your employees out-of-pocket.
Your best plan is to have a back-up power source for those times when you might face an extended power outage.
There are always variables, and each household and business is unique. You will want to discuss your coverage with an agent if you have any questions or concerns.
If you don’t have an agent or are looking to find one in the Bay Area, give me a call. I’m happy to help you with your insurance needs.