Home Insurance and Explosions

iStock_000015062165XSmallWith the recent fertilizer factory explosion in West, Texas, making the news, it has brought up a question that might be on the minds of many homeowners: are damages caused by an explosion covered on the home insurance policy? The answer is actually not a simple “yes” or “no” as you might think. Because explosions are not always the sole cause of damage or destruction to a home, more than one peril can be triggered on the home insurance policy. As a result, it can be difficult to ascertain the exact cause of damage, which then results in some ambiguity as to what is actually covered.

In addition to the explosion in Texas, the 2010 gas line explosion in San Bruno, Calif., also resulted in a significant number of homes damaged or destroyed. A large fire also resulted. While you certainly don’t expect something like this to happen to your home, it’s nevertheless a good idea to understand what kind of coverage you have on your policy.

In most home insurance policies, explosion is a basic peril that is covered without any caveats. For example, some perils on the policy have a short paragraph that describes the circumstances under which coverage does or does not apply. However, when it comes to explosions, the word “explosion” is listed by itself without any additional clarification. This is actually beneficial as it would appear that damage caused by explosions is largely covered, without any exceptions.

Unfortunately, some other exclusions to the policy may take away the benefit of the standard coverage for explosions. For example, under the exclusion for nuclear hazards such as nuclear reaction, radiation, and/or radioactive contamination, resulting explosions are excluded. This is a good example of why you need to carefully read through your home insurance policy. If you had simply stopped at the “perils covered” section of your policy, you would think that all explosions are covered. It’s only by digging a bit deeper that you find the carve-out for explosions due to nuclear hazards. Another potential exclusion for explosions is when they are the result of a war or warlike activity. The policy excludes damage resulting from such situations and you will be left with uninsured damage.

To the extent that your home is damaged by an explosion and is covered by the home insurance policy, you should also be aware of some additional policy benefits. While your primary concern is to have your home repaired or rebuilt, you will have some other pressing needs in the wake of such an event. Keep in mind the coverage your policy provides for additional living expenses. It’s very likely that you will not be able to even return to your home, let alone live there after an explosion. The additional cost of finding other shelter is a benefit provided by most home insurance policies.

Another nice benefit of the home insurance policy is coverage for debris removal. Before you can get started with the rebuilding process, you need to clear all the remaining parts of your damaged home. This activity can actually be quite expensive so the policy does help out in this regard.

As you can see, fairly extensive coverage is on your home insurance policy for damage arising out of an explosion. However, to properly benefit from your coverage, you need to know what coverage you actually have. The best way to do this is to read your policy before anything actually happens to your home.

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