Power Surge and Damage to Personal Property

Q: Lately there have been power outages in our area because of storms. When the power returns, it is often accompanied by a power surge. These can blow the electronic components of TVs, appliances, computers, and other equipment.
A typical special form homeowners states that although it covers "sudden and accidental damage from artificially generated electrical current," the coverage does not include loss "to a tube, transistor or similar electronic component."
If this limitation is applied, it seems there is no coverage for any modern household appliances, since virtually all contain micro chips or other electronic components. Is this correct?

A: Yes. There is very little coverage for these appliances. The newer homeowners edition (ISO 2000) enlarges on the limitation: "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."
There are ways to insure this property. If the homeowner is insured on an HO-3 (or, if using the ISO forms, an HO 00 03), then the HO 00 15, which provides "special perils" coverage, can be attached. This means that coverage exists unless there is an exclusion that eliminates coverage, but there is none. Special computer coverage could be added for an additional premium, although if the HO 00 15 is attached this endorsement should not be necessary.
The ISO 2000 program includes an HO 00 05, which provides "special perils" coverage for dwelling and personal property. If an insured selects this option, again there is no need for the special computer coverage endorsement.
One of the section I exclusions precludes coverage for loss resulting from power failure (some forms state "power interruption") unless an ensuing covered loss results, but that is not the same thing as a power surge.

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