​ Surge Protection vs Home Insurance | FirstEnergy Home
390 views | March 18, 2021

Why Purchase Surge Protection vs Homeowner's Insurance

This article will explain a power surge, its causes, and if surge insurance should be purchased if not covered in homeowner’s insurance.

There's no single way for power surges to occur. Residential power circuits generally experience a surge for two reasons: load switching within the house and external surges related to lightning.

The frequency of surges caused by lightning is affected by local geographical and meteorological conditions. Internal surges caused by load switching on home appliances are likely to be repetitive, and surges can occur several times a day.1

Power surges can destroy electrical appliances and electronic devices plugged into the sockets when a surge occurs, depending on the severity.

Here's the question. Do homeowner’s insurance plans cover power surges or electrical repairs? Homeowner's insurance might cover electronics or appliances if fried by a power surge.

However, it depends on the kind of coverage in the homeowner's insurance policy and the reasons behind the surge. This article will explain a power surge, its causes, and if surge insurance should be purchased if not covered in homeowner’s insurance.

Table of Contents

What is a Power Surge?

A power surge is a surge in electrical power – an unforeseen voltage spike that forces more current than necessary in the electrical system.

Power surges can cause electrical fires or damaged sockets. They can happen at a lower voltage from a hairdryer and at a much higher voltage if lighting directly strikes a transformer.

Here are the two types of power surges:

Internal Power Surges

Internal power surges are the most common type of surges in a household. They can happen many times a day. It usually occurs when devices that have motors start or shut off as this diverts electricity to and from other electrical appliances.

Air conditioners and refrigerators are more than often the main culprits. Can a power surge damage a refrigerator's compressor? Yes, it can. However, smaller devices and power tools can also cause a surge.

External Power Surges

External power surges stem from outside the house. Lightning strikes usually cause them, tree limbs continuously touching a power line, or even when a small animal gets into the transformer.

Such power surges can also happen when the power returns after an outage; it can come into a house through cable TV and telephone lines. If the TV's not working after a lightning storm, it may be because of a power surge.

Why Worry About a Power Surge?

Every household includes items that are susceptible to power surges. Anything that contains a microprocessor is highly vulnerable to power surges.

These little digital components are sensitive, and even a small voltage fluctuation can easily disrupt its function.

Microprocessors are in thousands of consumer items, such as TVs, microwaves, computers, and even "low-tech" heavy appliances like washing machines, dishwashers, and refrigerators.

Like a lightning strike, large power surges can cause instantaneous damage, melting metal and plastic parts, and even fry the circuits. Fortunately, these kinds of power surges rarely happen.

On the other hand, low-level power surges won't blow fuses or melt parts, but "electronic rust" can happen, which gradually degrades the appliance's internal circuitry to the point that it eventually stops working.

Small power surges won't leave any outward evidence, so it's possible not even to be aware that they're happening, even though they might be occurring dozens of times each day.

Does Home Insurance Cover Power Surges?

Whether or not homeowner’s insurance policies cover power surge damage ultimately depends on what exactly caused the surge. In standard homeowners’ policies, protected causes include sudden accidental appliance damage generated artificially from electrical current and lightning strikes.

For instance, if a household experiences a lightning strike that causes a power surge that fried a computer and TV, homeowner’s insurance might help pay to replace the damaged items, but only up to the personal property coverage limit.

If a power surge originated from the electrical company that damaged appliances or devices, it might be considered an artificially generated electrical surge covered in most cases.

However, some insurers don't cover the loss of transistors, tubes, and other electrical components that operate electronic devices; this would generally exclude many home appliances such as stoves and refrigerators.

If your homeowner's insurance covers power surges, the reimbursement amount depends on whether it's an actual cash value policy or replacement cost policy. The reimbursement will depend on the particular item's depreciated value or things in an existing cash value policy.

But, if it's a replacement cost policy and covers power surge damage, the insurer will reimburse the items for new ones, up to the policy's set limit.

Is Lightning Damage Covered in Homeowners Insurance?

A lightning strike has the potential of causing a fire inside or outside a home. It can damage or destroy electronics, wiring, and appliances. In some rare cases, it can harm occupants in the house.

Here's the good news. After taking an extensive look at many homeowners' policies, most cover power surges caused by lightning strikes and fires caused by them, with no form of exclusions.

Almost all standard homeowner’s insurance policies should provide coverage for:

Personal Property

Coverage can include appliances, electronics, furnishing, or any other interior items damaged or destroyed due to a lightning strike.

According to the Insurance Information Institute, insurers tend to cover personal possessions at 50% - 70% of the total amount of insurance on the home structure.2

Additional Living Expenses

The policy would cover the cost of living somewhere else while the damaged home is under repair or rebuilding. This type of coverage usually sums up to almost 20% of the house value.3

Other Structures

This form of coverage will help pay for the damage done to things such as a shed or garage and equates to 20% of the home's coverage limit value. 4

How to Prevent Power Surges

Several proactive steps can protect a home from power surges.

Install a Whole-House Surge Protector

Companies offering electrical engineering design services can help install a protector at the home's primary breaker. Does a surge protector protect against lightning? It will act as a gateway for current moving towards the electrical system.

If there was a spike in voltage, the surge protector will shut down the power and redirect the excess current to an underground wire.

Add Extra Protection for Particular Devices

Even with a whole-house surge protector installed, it's crucial to provide sensitive electronics like refrigerators and computers with additional protection.

Additional protection includes a UPS to protect the computer, a surge station for phone and cable lines, and power strips.

Upgrade the AC Units

AC units restart many times during the day. When this occurs, the current increases, increasing the chance of a power surge.

Newer AC models are generally energy-efficient, which means they require less power to operate. As a result, the extra amount of current electricity during circulation should be less when it restarts, lowering the chances of a power surge.

Unplug Devices and Appliances during a Storm

To be on the safe side, unplug devices and appliances during a storm.

Inspect the Wiring

Wires that are exposed or damaged offer little resistance to surges and disrupt the natural flow of electricity. Faulty wiring may increase the probability of a power surge, especially to the outlets they supply.

If you notice any vibration or buzzing sounds coming from outlets, frequent tripping of circuit breakers, and a noticeable burning smell or marks coming from power outlets, contact an electrician to avoid potential danger.

In Conclusion

Suppose there are many power surges in the area due to lightning strikes. There might be no need to buy any additional insurance if the homeowner's insurance policy adequately covers the home. Lightning is a peril that is most likely covered and usually has no specific claim limit.

However, getting additional power surge insurance can be a good investment. Ultimately, the best strategy is to work alongside the insurance agent to understand the covered amount for power surges.

Also, it's essential to review your homeowner's insurance policy every year. To read more on home maintenance, please browse other articles in the FirstEnergy Home Learning Library.

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© 2021 FirstEnergy Home

1 National Institute of Standards and Technology. Surge Voltages in Residential and Industrial Power Circuits. Retrieved from https://www.nist.gov/system/files/documents/pml/div684/Res-Ind-surges.pdf
2 Insurance Information Institute. How much homeowners insurance do I need? Retrieved from https://www.iii.org/article/how-much-homeowners-insurance-do-you-need
3 Insurance Information Institute. How much homeowners insurance do I need? Retrieved from https://www.iii.org/article/how-much-homeowners-insurance-do-you-need
4Insurance Information Institute. How much homeowners insurance do I need? Retrieved from https://www.iii.org/article/how-much-homeowners-insurance-do-you-need

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