California Insurance Word Definitions Part 1
Insurance Peril Definitions – Part One
Have you ever read your Homeowner’s insurance policy (including Renters, Rental property or second home)? Talk about confusing for the average policy holder! It’s full of terms like “hazard,” “peril,” or “cause of loss.” These terms refer to events where damage is done to your property that is covered by your California home insurance policy. Following are some brief explanations of the most common insurance perils:
Fire – Fire is defined by the courts as “combustion sufficient enough to produce a spark, flame or glow.” Fire is not smoke. Fire is not charring. A fire must produce a spark, flame or glow.
Not all fires are covered under the fire peril. The courts have distinguished between “friendly” and “hostile” fire. A friendly fire is one that burns where it is intended to burn: a flame on a gas stove; a fire in a fireplace; fire in an outdoor grill. A hostile fire is a fire that burns where it is not intended to burn: the kitchen drapes; the rug by the fireplace; a tree near the outdoor grill.
Only direct damage caused by hostile fire (including smoke from a hostile fire) is covered by the fire peril.
Hail – Hail damage is just that! Damage caused by the direct action of hail to the insured property. For interior hail coverage, the hail must cause damage to the outside of the insured building allowing hail to get inside and cause damage. However, if a window or door was left open, allowing hail to enter a building, that damage would not be covered.
As with the windstorm coverage, hail coverage does not cover loss to awnings, signs, radio or television antennas, lawns, plants, shrubs, trees or any other personal property outside the structure.
Lightning – Lightning is “naturally generated electricity from the atmosphere.” The damage covered by the lightning peril may be the result of lightning itself or the result of a fire caused by the lightning.
The other common cause of lightning loss is the surge of electricity. Appliances in a house can be damaged by the electrical surge. The cause must be established for coverage to apply.
Smoke – Smoke damage is usually referred to as “sudden and accidental damage from smoke.”
Any “sudden and accidental” damage from smoke caused from any source is covered, except smoke from agricultural smudging or industrial operations. The damage must occur over a short period of time.
Windstorm – Windstorm coverage involves damage caused by direct action of the wind, including high winds, cyclones, tornadoes and hurricanes. It typically covers wind damage to a building’s exterior, but will also cover interior damage if the wind breaches the exterior.
The windstorm must be strong enough to cause direct damage to more than one location in order to be considered a “windstorm” loss. The windstorm coverage does not include loss to property located outside of the insured building, such as: awnings, signs, radio or television antennas, lawns, plants, shrubs, trees or any other personal property outside the structure.
Stay tuned tomorrow for some more California Insurance education!
Written by: Rhonda Remland
Photo Credit: Fluence Portland