COVERAGE DECISIONS: ELECTRICAL LOSSES

Does homeowners insurance cover power surge damage? Lightning, the grid, and the circuitry carve-out

In the standard HO-3 policy form, a surge caused by lightning is a lightning loss, and electronics damaged by it are covered after the deductible. A surge from the utility or another man-made source falls under a separate peril that excludes the circuit boards inside appliances, computers and TVs, which is where most surge damage happens. Wiring and built-in parts of the house are judged under broader dwelling coverage, and the utility itself may owe something under its tariff, usually capped.

Disclaimer: Published averages and benchmark ranges, not a quote. This page is not insurance advice. Your premium will differ based on your home, location, claims history, and insurer. Flood insurance is separate from a standard homeowners policy.

Peril 15 in the personal property list of the ISO Homeowners 3 Special Form reads, in full: "Sudden And Accidental Damage From Artificially Generated Electrical Current. This peril does not include loss to tubes, transistors, electronic components or circuitry that are a part of appliances, fixtures, computers, home entertainment units or other types of electronic apparatus." The first sentence sounds like surge coverage. The second removes the parts a surge usually destroys. A television, a router, a washing machine's control board and a smart thermostat are almost entirely "electronic components or circuitry," so a homeowner who reads only the heading of the peril can expect a payment the form does not make. The words "artificially generated" matter just as much, because they leave natural electricity, meaning lightning, to a different peril with no such carve-out.

Five sources of a surge, five different clauses

Each surge source is matched to a clause in HO 00 03 10 00, the 1999 ISO sample the Insurance Information Institute posts. Your insurer's form and your state's amendments may word any of these clauses differently, and many policies add endorsements, so treat the right-hand column as a pointer to the clause a claim on your own policy will turn on.

The table shows that a claim is decided twice: once by where the current came from, and once by which coverage part owns the damaged item. A surge that destroys a TV and the furnace control board in the same instant can produce a denial on the first and a payment on the second, under one policy and one deductible.

Lightning: the surge cause with the fewest exceptions

Coverage C insures personal property "for direct physical loss to the property described in Coverage C caused by any of the following perils," and the first one listed is simply "Fire Or Lightning." The sample attaches no conditions or exceptions to that peril. It does not care whether the bolt hit the roof, a tree in the yard or a pole a block away, as long as lightning caused the direct physical loss. That makes a lightning finding the most valuable fact in a surge claim for electronics.

The same storm can produce either finding, which is why adjusters ask. A thunderstorm also knocks branches into lines, trips reclosers and makes the utility switch circuits, and each of those events can send a voltage spike into a house with no lightning involved. Under the sample form, the cause decides between a peril with no carve-out and a peril whose carve-out removes the circuit boards. The record you build in the first day matters more than the policy summary you were given at purchase:

• the date, time and approximate location of the strike, and whether a flash and a thunderclap arrived together;
• physical marks: scorched outlets, a split tree, a damaged antenna or a burned cable entry point;
• which devices died, and on which circuits, because a lightning surge often enters through more than one path, such as a cable or phone line;
• a repair technician's written statement of the cause, in words, not just "board failed."

On the dwelling side, lightning damage to wiring, a breaker panel, a well pump or attached fixtures falls under Coverage A, which insures "against risk of direct physical loss to property described in Coverages A and B" unless an exclusion applies. Lightning is not on the exclusion list, so it is covered there too. The practical gap is not coverage but the deductible, which the next sections work through with numbers.

Grid and generator surges: what peril 15 gives and takes back

Peril 15 covers "sudden and accidental" damage from "artificially generated electrical current." The phrase is broad. It does not say the current must come from the utility, so it also reaches current from a home generator, a solar inverter, a neighbor's equipment sharing a transformer, or the house's own system. The two adjectives exclude slow processes: a device worn down by years of small voltage fluctuations has not suffered sudden and accidental damage.

Then the carve-out removes loss to "tubes, transistors, electronic components or circuitry that are a part of appliances, fixtures, computers, home entertainment units or other types of electronic apparatus." Three readings follow from those words:

• Electronics are out, even when they sit inside an ordinary appliance. The control board of a refrigerator, washer or microwave is circuitry that is part of an appliance. The list also names fixtures, which pulls in the electronic parts of light fixtures, ceiling fans and similar items owned as personal property.
• Non-electronic parts may still be in. The carve-out names electronic parts, not electrical parts in general. A motor winding that burns out, a cord that melts, or a lamp whose wiring scorches is arguably damage the peril still covers. Expect to need a technician's statement saying which part failed.
• The carve-out applies only to Coverage C. Peril 15 is one of the named perils for personal property. The dwelling's coverage does not depend on that list, so the carve-out language does not appear there.

The result is familiar to anyone who has filed one of these claims. After a utility surge, a homeowner with a dead TV, a dead router and a dead garage door opener may find that the TV and router are excluded as circuitry, while the garage door opener's motor, if the motor rather than its logic board burned, is a closer question. Peril 15 also appears in the food spoilage discussion, because a surge can kill a refrigerator's control board; our guide to food spoilage after a power outage sorts ten outage causes and covers that overlap, so it is not repeated here.

The dwelling side: open perils, the power failure exclusion and wear

Coverage A insures "the dwelling on the 'residence premises' shown in the Declarations, including structures attached to the dwelling." Wiring in the walls, the service panel, hardwired smoke detectors, built-in lighting and a central heating and cooling system are, in the ordinary reading, part of the dwelling. The insuring words are open: the form insures against risk of direct physical loss and then lists what it will not pay for. A surge from the grid is not named on that list, which is why dwelling damage from a utility surge is the strongest non-lightning claim most homeowners have.

An insurer reviewing that claim will test three provisions.

Exclusion A.4, Power Failure. It excludes "the failure of power or other utility service if the failure takes place off the 'residence premises'." It then adds: "But if the failure results in a loss, from a Peril Insured Against on the 'residence premises', we will pay for the loss caused by that peril." This is an anti-concurrent-cause exclusion, meaning it applies "regardless of any other cause or event contributing concurrently or in any sequence." Whether a voltage spike is a "failure" of power is a question the sample's words do not settle; the clause is written for outages, and a surge is the opposite of no power. If an insurer cites it, ask it to explain in writing why a surge counts as a failure, and whether the exception for a resulting loss on the premises applies.

Perils Insured Against A.2.c.(6). The open-peril grant does not cover loss caused by "wear and tear, marring, deterioration" or "mechanical breakdown, latent defect, inherent vice, or any quality in property that causes it to damage or destroy itself." A control board that fails because it was old, or because its own components failed, is that kind of loss. A board destroyed by an outside spike is not, in the ordinary reading, but the insurer may ask for evidence of the outside cause.

Exclusion B.3, faulty maintenance and workmanship. It excludes "faulty, inadequate or defective" design, workmanship, materials or maintenance. A surge that started inside the house because of a loose neutral connection or a corroded panel can be traced back to maintenance. Exclusion B carries an ensuing-loss sentence, though: "any ensuing loss to property described in Coverages A and B not precluded by any other provision in this policy is covered." So the corroded connection is the owner's cost, while wiring or fixtures damaged as a result may still be paid. Our guide to Federal Pacific and Zinsco panels covers the separate question of how an older panel can affect eligibility before any loss happens.

The utility's tariff: a second route with a ceiling

An electric utility's obligations to customers are set out in its tariff, the rulebook of rates and service terms it files with the state utility commission. Most tariffs include a limitation of liability for interruptions and voltage fluctuations. A claim against the utility is made to the utility first, usually through a damage claim form. The rules vary by state and by utility, so read the tariff on file with your state's commission for the utility that serves your house. Two states show how far apart they can be.

Pennsylvania. In a 2022 initial decision on a complaint against PECO Energy Company (Docket No. C-2021-3028358, dated April 14, 2022), an administrative law judge of the Pennsylvania Public Utility Commission described the utility's tariff in force at the time: the utility "does not guarantee a continuous, uninterrupted or regular supply of electric service," is not liable for damages due to "accident, strike, storm" or other causes beyond its control, and "in all other circumstances" its liability "shall not exceed $1,000, absent willful or wanton misconduct." The customer reported more than $8,000 in damage to home equipment and appliances from a surge the utility accepted responsibility for. The decision directed the utility to pay the $1,000 limit and found no willful or wanton misconduct. It also stated that "the Commission lacks the authority to award damages." A second initial decision that year, on a complaint against Metropolitan Edison Company (Docket No. C-2022-3030565, dated August 24, 2022), upheld a denial: the record showed both surges were caused by trees outside the utility's right-of-way, and the complainant had not submitted documentation of the damage.

Utah. Rocky Mountain Power's Electric Service Regulation No. 5(2)(a), as quoted in the utility's January 2, 2026 answer in Utah Public Service Commission Docket No. 25-035-65, states that "the Customer shall provide devices to protect his/her equipment from high and low voltage, overload, single phasing, phase reversal or other abnormal conditions." The utility relied on that rule to deny a surge damage claim, and its answer also cited a separate rule disclaiming liability for fluctuations from causes beyond its reasonable control. In an order issued April 7, 2026, the commission dismissed the complaint, saying it "has no authority to adjudicate civil claims or to award monetary damages" and that "the question of liability must be determined by a court of general jurisdiction."

Four practical points follow from those records, and they apply in most states even though the dollar figures and wording differ:

• The commission is a referee for service rules, not a claims court. A commission complaint can establish whether the utility broke its tariff or a service rule. In both states above, the commission said it could not order the utility to pay damages.
• Causes beyond the utility's control are usually carved out. Storms, falling trees from outside the right-of-way and lightning are the common examples. A lightning surge almost never succeeds against the utility, which is one more reason lightning claims belong with the insurer.
• A cap can be smaller than the loss and still worth having. The $1,000 figure in the Pennsylvania tariff is less than the reported damage but is larger than many deductibles, and the policy deductible does not apply to it.
• Documentation decides it. The Pennsylvania denial turned partly on the lack of records. Keep the utility's outage or incident number, photos, repair invoices and the technician's cause statement.

Utility claims and insurance claims can run at the same time. The HO-3 sample's Subrogation condition says the insurer "may require an assignment of rights of recovery for a loss to the extent that payment is made by us," and that an insured "may waive in writing before a loss all rights of recovery against any person." Do not sign a release with the utility that waives more than the utility is paying for without telling the insurer, and tell the utility if the insurer has already paid part of the loss.

Two damaged items, three settlement rules

The figures in this section are example inputs chosen by the desk to show the policy arithmetic. They are not published averages, repair benchmarks or a quote for any home. Replace each labelled input with the numbers from your own estimate, invoice and declarations page.

Two Loss Settlement rules from the sample drive the results. Personal property and, separately listed, "awnings, carpeting, household appliances, outdoor antennas and outdoor equipment, whether or not attached to buildings" are settled "at actual cash value at the time of loss but not more than the amount required to repair or replace." Buildings under Coverage A are settled at replacement cost "without deduction for depreciation," subject to the 80 percent insurance-to-value condition, but the insurer pays "no more than the actual cash value of the damage until actual repair or replacement is complete." There is an exception for small losses: if the cost to repair is less than 5 percent of the building's amount of insurance and less than $2,500, the insurer settles at replacement cost whether or not the repair is complete. Our guide to recoverable depreciation explains the holdback that applies to larger building claims.

The board figure, $1,100, is less than 5 percent of $300,000 ($15,000) and less than $2,500, so if the board is settled as part of the building it is paid at replacement cost even before the repair. The sample's Deductible provision takes the deductible from "the total of all loss payable under Section I," which means one deductible for the event, not one per item.

Check one row by hand. In the first row, the TV's actual cash value is $1,400 less 50 percent, or $700. The board is a building item paid at replacement cost, $1,100. Together they make $1,800 of loss payable, and the flat deductible leaves $1,800 minus $1,000, or $800. With a 1 percent deductible on a $300,000 dwelling, the deductible is $3,000, which is more than the whole loss, so nothing is paid.

Three results in those rows never show up in a policy summary. First, the lightning finding is worth $700 on the TV in this example, but only if the total loss clears the deductible. Second, the question of whether a built-in HVAC part is "a household appliance" moves the board between replacement cost and actual cash value, a $440 difference here. The sample lists household appliances among items settled at actual cash value "whether or not attached to buildings," and it does not define the term; a furnace or air handler is not the kind of item that list usually describes, but some insurers read it broadly. Third, under a percentage deductible, a typical single-event surge loss is often below the threshold where a claim pays anything. Our guide to flat versus percentage deductibles shows what 1 and 2 percent come to at other dwelling limits.

A utility payment can change the result. If the Pennsylvania-style $1,000 cap applied to the third row and the utility paid in full, the homeowner would recover the $1,000 that the deductible withheld, and the insurer, having paid $100, could look to the utility for its share through subrogation. The utility payment does not reduce the deductible, but it can fill the gap the deductible leaves.

Proving the cause when the surge left no mark

Most surge claims have no visible damage beyond devices that will not turn on. The Duties After Loss condition in the sample requires the insured to give prompt notice, "protect the property from further damage," prepare "an inventory of damaged personal property showing the quantity, description, actual cash value and amount of loss," and, as often as the insurer reasonably requires, "show the damaged property." The last duty is the one people break: a dead TV put out with the trash cannot be shown, and its circuit board cannot be examined for the burn pattern that separates a lightning strike from a surge or an internal failure.

A surge protector that failed or a whole-house protective device at the panel is also relevant. Nothing in the HO-3 sample makes surge protection a condition of coverage, but a utility tariff may. Rocky Mountain Power's regulation, quoted above, puts that duty on the customer, and in the Utah filing the utility pointed to the 2020 National Electrical Code, which it said requires a surge protection device for residential dwellings. Whether a house built before that edition must have one is a local building code question, not an insurance one.

Equipment breakdown coverage and the gap it is sold to close

The two holes in the base form are the electronics carve-out in peril 15 and the mechanical breakdown exclusion on the dwelling side. Equipment breakdown endorsements exist to reclaim some of that ground for home systems and appliances. Whether a given version reaches surge damage is set by the wording of that insurer's filed form, not by the name on the declarations page, so the questions to put to the agent are specific:

• Does it name power surge, electrical arcing or artificially generated current as covered causes?
• Does it cover home electronics and computers, or only home systems such as heating, cooling, water heaters and panels?
• Does it pay replacement cost or actual cash value, and does it carry its own deductible?
• Does it exclude items under a service contract or manufacturer warranty?

A home warranty is a different product again: a service contract built around items that fail from age and use, so whether it pays for surge damage depends on what its own exclusions say about outside electrical causes. Our home warranty vs homeowners insurance guide sets the wear-and-tear line between the two. Owners of rooftop solar have a related question, because an inverter is both electronic and part of the dwelling when the panels are owned; our guide to solar panels and your policy covers how owned and leased systems are insured.

An open-peril contents form changes the analysis too. Under an HO-5, personal property is insured against risk of direct physical loss rather than named perils, so the peril 15 carve-out is replaced by whatever exclusions that form lists. Our HO-3 vs HO-5 comparison shows where the broader form differs.

From the dead outlet to the claim form, in order

Start with safety: if a panel smells of burning, outlets are scorched or breakers will not reset, have an electrician check the system before anything is plugged back in. Then report the event to the utility and write down its incident number, because that call creates the outside record a later dispute will rely on. Photograph everything and keep the damaged devices. Get one written repair estimate or cause statement per major item, and compare the total with your deductible before you decide whether to file. Our guide on whether to file a homeowners claim covers how a small paid or reported claim can follow a house on its loss history.

If the numbers clear the deductible, notify the insurer and name the cause you believe applies: lightning, if you have the evidence, or a utility surge, with the outage number. Ask the adjuster to say in writing which coverage part and which peril or exclusion it applies to each item, because that answer tells you whether to pursue the utility, appeal, or stop. Similar line-drawing problems, such as spoiled food and buried service lines, are in the coverage decisions hub; the claims hub walks through first notice to payment.

Surges, breakers and receipts: further questions