It's A Bird . . . It's A Plane . . .

IT'S A METEOR! Those of you left wondering after the recent meteor incident whether such damage would be covered by your home owner’s insurance will rest easier tonight knowing the answer is most likely yes.

The typical homeowner’s insurance policy has what’s called “open-perils” coverage, meaning it protects against all perils except those specifically excluded by the policy. Fortunately for anyone unlucky enough to suffer home damage from falling space debris, meteor damage isn’t typically found on the list of exclusions. Why? Because it’s so unlikely to happen the insurance company is more than willing to take the risk.

Collecting premium dollars in exchange for insuring against unlikely events is an insurance company’s bread and butter. This is why accidental death and dismemberment insurance is so affordable. Statistically speaking, very few of us will die in accidents or lose limbs, thus the insurance company is more than willing to take our premiums in exchange for paying the occasional claim.

What is on the list of exclusions for your typical home owner’s policy? Well, damage from floods and earthquakes for one.  Also specifically excluded are water damage that’s the result of sewers or drains backing up, intentional damage to your home or damage from neglect (think termites and mold), and damage from power failures caused by uninsured perils like an electrical grid failure.

Oh, and lest I forget, most policies also exclude damage to your home as a result of war or radioactive contamination. So, bottom line, if a bird, a plane, or even a meteor damages your home, you’re covered. But, should the sewer back-up or the contents of your freezer spoil due to a brown-out, absent a rider that specifically covers this, you’re on your own.