Special Form vs. Named Peril
You should check your homeowners policy to make sure that your building and personal property is covered on a special form rather than a named peril basis. Named peril means that the policy insures against the sources of loss (perils) that are listed in the policy such as fire, earthquake or hail. Special form coverage protects property against any source of loss that is not specifically excluded. Under named peril coverage, the policyholder may have to prove to the insurer that a loss was caused by a listed peril. With special form coverage, the insurer can only deny a claim if it can prove that the source of loss is excluded.
Generally, a special form policy is preferable since it offers more coverage than a named peril policy. Here are a few examples of losses where special form coverage made the difference and a claim was paid:
- A battery was left on a hardwood floor. When the battery acid leaked out, it spread to the point that it was necessary to replace a large section of the floor.
- An insured tipped over a bucket containing ammonia for soaking diapers. The solution ruined a room’s wall-to-wall carpet.
- A deer jumped through a picture window. It went wild in the house, denting walls and furnishings and bleeding as it ran. It eventually jumped through another window.
- A washing machine was running when its load of clothes became unbalanced. As the washer’s spin’s cycle began, it shook and "walked" from its position into a brand new water heater, poking a hole in the heater’s casing and breaking its glass liner.
- An insured was walking on the floor joists of his unfinished attic. The insured slipped off of the joists and fell through the living room ceiling, causing extensive damage.
- A two-year-old boy found a hammer and went on a spree through his parent's house, seriously damaging several plaster walls, a toilet bowl, wash basin, dressing table and other items.
- A bucket of paint was spilled on an insured's hardwood floors, getting into floor cracks and pores. It was necessary to replace much of the wood.
Finally, an insured converted his oil furnace to gas without removing the home’s oil-input pipe. On its regularly scheduled day, an oil company tanker arrived and pumped 500 gallons of oil into the insured's basement.