Does Car Insurance Cover Electrical Fires? What Drivers Need to Know

Electrical fires in vehicles can cause severe damage, leaving drivers wondering if their car insurance covers the repairs. Unfortunately, the answer is complicated, as policies have exclusions for mechanical breakdowns. However, comprehensive coverage may provide some protection if certain criteria are met. This article explains when car insurance does and does not cover electrical fires.

How Electrical Fires Start in Vehicles

Electrical fires account for around 25% of all car fires, according to the National Fire Protection Association These blazes often start due to electrical system failures or malfunctions Some common causes include

• Damaged or loose wiring resulting in sparks or overheating
• Electrical shorts causing wires to overheat
• Corroded battery terminals leading to sparks
• Defective alternators, starters, or voltage regulators overheating
• Aftermarket electronics like stereos overloading circuits

Electrical fires can happen in any make or model vehicle new or old. But older cars with deteriorated wiring insulation tend to be most vulnerable.

Will Car Insurance Cover an Electrical Fire?

Whether car insurance covers damage from an electrical fire depends on your policy type and sometimes the exact cause Here’s how standard coverages respond

Liability Insurance

Liability insurance covers damage you cause to others when you’re at fault for an accident. Since electrical fires are not collisions, liability does not apply.

Collision Insurance

Collision pays to repair or replace your vehicle after an accident with another car or object. Again, it does not cover fire damage.

Comprehensive Coverage

Comprehensive policies pay for damage from non-collision events like fire, falling objects, floods, vandalism, and theft. So comprehensive coverage will typically pay for fire damage, including from electrical causes.

However, there are two important exceptions:

• If the fire resulted from crash-related damage, such as wires being severed in an accident, then collision coverage would pay instead of comprehensive.

• Mechanical breakdown exclusions may apply if the fire was caused by an electrical system failure. In this case, your insurer may deny the claim, arguing that the policy was not intended to cover inherent vehicle defects or faulty workmanship.

The applicability of exclusions depends on your individual policy language and varies by insurer. Some companies make broader exceptions while others limit exclusions to specific circumstances.

The bottom line: Comprehensive coverage offers the best shot at getting electrical fire damage reimbursed, but there are no guarantees due to mechanical breakdown gray areas.

Steps to Take After an Electrical Fire

If you experience an electrical fire in your vehicle, here are some tips on navigating insurance claims:

• Move to safety – Your first priority is getting out of harm’s way to protect yourself and any passengers. Avoid breathing smoke and move far away from the fire.

• Call 911 – Even if you extinguish a small fire yourself, report it to authorities so there is an official record. This can help with determining fault later.

• Document damage – Take extensive photos and videos showing the fire’s origin and resulting destruction. Close-ups of scorched wiring can prove an electrical cause.

• Don’t make repairs – You’ll need to give your insurer’s claims adjuster access to inspect the damage before disposal or repair.

• File a claim – Contact your insurance provider promptly with details of what happened. Provide police and fire department contacts.

• Negotiate – If your claim gets denied based on mechanical failure exclusions, point out the fire’s electrical spark source. Appeal denials through your state insurance department if needed.

Getting the Right Coverage

While comprehensive coverage is your best bet for getting electrical fire damage covered, limits and deductibles apply. It pays to have ample coverage amounts so you’re not left covering huge out-of-pocket repair bills. When shopping for a new policy or reviewing your existing one, consider these tips:

• Buy more than state minimums – Most states require just $5,000 or $10,000 in property damage coverage. That may not be enough for a burnt car. Opt for $50,000 or higher limits.

• Get guaranteed/stated value coverage – This pays the specified amount in the event of a total loss, rather than depreciated actual cash value that could be less.

• Lower your deductible – Choose a $500 or $1,000 deductible instead of $2,000 or higher to reduce your out-of-pocket costs. Just expect to pay a higher premium.

• Add roadside assistance – It will cover the cost of towing your burnt vehicle to a repair shop.

• Review exclusions – Read your policy to see if mechanical or electrical failure scenarios are addressed. Choose a company that limits these exclusions.

• Inspect your car – Have your vehicle’s electrical system periodically checked for loose wiring or deterioration that could cause a fire.

While there are no guarantees, the right preparation can help ensure you have sufficient coverage in the event an electrical issue ignites your car. Being informed on policy provisions for fire damage allows you to make smart coverage choices. Discuss your risks with an agent and they can guide you in assembling a policy that would best protect your vehicle investment against unforeseen electrical perils.