Many homeowners have generators in case the power goes out. This is common because most residential areas are hit with rain, wind, or other types of storms. These generators help to keep food fresh, heat in the house, and water running. So when something happens to your generator, will your homeowner’s insurance cover it?
If your generator is damaged by a covered peril like a tornado or fire, then your homeowners insurance will cover it as part of your personal property coverage type C. If your generator fails due to regular wear and tear, it will not be covered by your insurance policy.
A generator is a great asset to any home. It can even provide benefits toward your annual premium. Continue reading to learn more about generators and how they are managed through your home insurance.
When your generator is covered by home insurance
Homeowners insurance will cover your generator if it is damaged or destroyed by any one of the 16 named perils within a homeowner’s insurance policy. This is a broad range of coverage that comes in handy when the unthinkable happens.
When insurance looks at a generator, it sees it as a piece of personal property. Personal belongings such as generators are usually covered under personal property coverage type C. What this means is your insurance policy will use the actual cash value or replacement cost to assess the generator and cut a check, less the policy’s deductible. The type of replacement insurance provided is dependent on the insurance policy you selected.
If your personal property is covered on an actual cash value basis, you will not receive the full dollar amount to buy a new generator, instead insurance company will deduct depreciation from the replacement cost of the generator. If your personal property is covered on replacement cost value basis, you will not have to worry about the depreciation.
Some examples of instances when a damaged generator will be covered are:
These are all different types of named covered perils. The perils covered will depend on your policy. A typical HO-3 policy covers personal property from damage caused by 16 named perils. If you have a premium HO-5 policy, your generator will be covered on an open-peril basis. Open-peril coverage protects against all risks except for the exclusions specified in your policy. After you file a claim, an adjuster assesses the claim and processes it, the insured should expect to see a check.
Uncovered generator issues
There are many instances in which your insurance will cover a damaged generator, but there are equally as many instances where they will deny coverage. This can be due to an exclusion in the insurance policy or due to other issues. The most common causes of denial are:
- Unpermitted installation/faulty installation. If your generator was not properly installed or did not receive a permit for installation, it may be excluded from your claim as it holds a higher degree of risk.
- Negligence. If you are a homeowner who knew there was a problem with the generator and its piping, and it then broke, you may not be eligible for the claim. Homeowners are required to maintain equipment; refusing to do so may result in a case of negligence.
- Electrical surge. Homeowners insurance does not cover items damaged due to an electrical surge. If you fry your generator by drawing too much power or causing a surge in your electrical system, you will be on the hook for repair or replacement.
While these situations are not ideal, they do happen. Preventing them can help save you money and frustration in the long run. It can also help prevent you from filing a claim that will stay on your insurance history whether it is approved or denied.
Do standby generators lower my premium?
Standby generators are a type of generator that automatically switch on in the case of a power outage. These generators are useful because they help to prevent power surges, frozen pipes, and loss of food and ensure other important functions work during an outage.
Because of their convenient features, many insurance companies will provide homeowners with discounts on their annual premiums if they have these types of generators. It lowers the risk for the home overall to have one.
Generators generate safety
Generators are a great way to keep your home warm and comfortable in the case of a power outage. This is extremely important because it can also help to prevent other unforeseen perils from occurring directly related to a lack of power. So if you are looking at generators, don’t hesitate. They are a great investment for your home and your family.
