Fires can cause irreparable damage and loss of property. Hence, it’s always a good idea to get fire insurance. This policy type provides compensation against losses caused by fire. The coverage for damages is determined by whether the cause of the fire is included in the policy’s scope.
Now, you may be wondering how to choose a fire insurance policy if the events covered are different across insurers and there are multiple causes for a fire. More specifically, the most common cause of fire is often electrical in nature, i.e., due to short circuits.
This blog will work to answer the question: Is a short circuit covered by fire insurance?
Short Circuit: Explained
In a short circuit, your electric wiring circuits experience an excessive flow of current. This happens when a low-resistance pathway of current allows current to bypass the normal route, resulting in collision and excess flow. There are many reasons for this to happen, including faulty wiring, broken insulation or other inoperative electric components.
How does a short circuit cause a fire? – The excessive flow of current creates a lot of electric friction and results in increasing heat. This heat, if not regulated in time, can quickly escalate and result in sparks, damaged wires and sometimes fire.
Short Circuit In Fire Insurance Policy
Numerous fire insurance benefits exist, including coverage for short-circuit fire-induced damage. Let’s understand how!
- A standard fire insurance policy from a reliable company generally covers a wide range of perils, including damage or loss caused by fire due to bushfire, theft, explosion, implosion, lightning, landslides, impact damage, missile testing, riots, bursting appliances, leakage from appliances and natural disasters.
- A short circuit can be considered electrical damage that is not included in a standard fire insurance policy coverage. What this refers to is that the electronic appliance that caused the short circuit will not be included in the fire insurance cost compensation.
The insurance company will not cover the expenses of the appliance’s repair or restoration.
- However, if the short circuit causes a fire, leading to damage and loss, the insurance provider will offer financial coverage for the repair and restoration of the same.
For instance, suppose the short circuit sets a certain amount of goods in your storage room on fire. The insurance provider will offer compensation under fire insurance policy coverage.
- Now, if you purchase your fire policy from insurers like Tata AIG, you can opt for an electric injury add-on. This additional cover offers financial coverage for loss and damage by fire to any electric appliance that is insured under the fire policy. This fire can be caused by excessive pressure, arcing, self-heating, or even a short circuit.
Hence, if you want to cover any property or asset loss or damage caused by a short circuit fire, you might want to buy a comprehensive fire insurance policy coverage with the add-on of electric injury.
Other Exclusions In Fire Insurance Policy
● Fire (Intentional)
Fire is an exclusion if it was caused by any heating or drying process, if it was intentional or if it was ordered by any public or government authority.
● Explosion/Implosion
Loss and damage caused by explosion or implosion is an exclusion if the appliance/structure exploded or imploded due to its own pressures or due to a centrifugal force.
● Landslides
Damage or loss caused by landslides is an exclusion if the damage happened due to the lack of design, workmanship, defective material, structural alteration or repair of property caused the damage.
● Electricity Leakage
Damage or loss caused by leakage of electricity from electric appliances is an exclusion if it was due to a lack of repairs or removal or due to extension.
● Misplaced property
Lost or misplaced property is an exclusion in the fire insurance policy.
● External Factors
External factors include riots, strikes, malicious damage and impact damage. Damage or loss caused by these external factors would be an exclusion if it happened due to a total or partial break in work, ordered by the government authorities or permanent dispossession of the property by unlawful means.
Ending Note
Standard fire insurance policies cover the damage caused by the fire resulting from a short circuit rather than the damages incurred to the appliance that caused the circuit failure.
Suppose you want to get the exact details relevant to your specific policy, including additional fire insurance policy conditions, exclusions, and coverage. In that case, you are advised to contact your insurance provider or review the policy thoroughly!