Circuit Breakers: Navigating Home Insurance for Short Circuit Damage

All the wires inside your home carry powerful electrical currents. Plug an item (like a lamp) into an outlet, and the current flows from the wires into the receptacle. But what happens when electricity goes rogue? A short circuit happens, and your home insurance coverage can be complex. 

Experts define short circuits as overcurrents—the wires are carrying much more than they should.[1] The current takes a shortcut and heads right back to the source of the power. 

A typical comprehensive homeowners insurance policy covers sudden and accidental damage from artificially generated electrical current.[2] In many cases, damage from a short circuit is covered. However, old wiring, neglect, and bad decisions can complicate your claims and result in a denial of payment. 

Frequently Asked Questions About Short Circuits & Homeowners Insurance 

We’ve compiled some of the most frequently asked questions about how short circuit claims are handled by homeowners insurance policies. 

How Do Short Circuits & Homeowners Insurance Policies Connect?

Every policy and claim is a little different. In general, insurance should protect you against issues that are sudden and outside your control. Problems that arise from neglect or known repair needs are often trickier to resolve. 

This table can help you understand how typical policies handle short circuits. Keep reading to see real-world examples and expert opinions on the topic. 

Cause of Short Circuit	What’s Covered?	What’s Not Covered?
Old wiring	Damage and resulting fire if your home has passed recent inspections	Damage and fires caused by knob-and-tube or aluminum wiring, especially if the homeowner has been told to replace it
Overloaded circuit	Damage and resulting fire	Most cases covered unless the company spots signs of severe neglect
Improper installation	Damage and resulting fire if your home passed inspections and the damage wasn’t caught	Damage and resulting fire if the installation was done by an unlicensed contractor and never inspected
Owner negligence	If the company can prove neglect, nothing would be covered	If the company can prove neglect, nothing would be covered

When Homeowners Policies Cover Damage 

A standard homeowners insurance policy will protect you from short circuit damage stemming from sudden problems you couldn’t prevent. 

For example, a family in Massachusetts had a home fire that started with a short-circuit within an electrical socket. Fire officials deemed the issue “accidental,” which likely means all of the associated fire damage would be fully covered by your insurance provider.[3] 

When Homeowners Policies Don’t Cover Damage 

During the claims process, your insurance company will look for evidence that your neglect or choices somehow contributed to the damage. Sometimes, they deny claims based on their investigation. 

Lawyers say insurance companies will “outright deny” claims stemming from problems with old knob-and-tube or aluminum wiring.[4] If your older home has this type of wiring, your company may require a special rider to cover any associated damage.

Electrical contractors say insurance companies may exclude damage stemming from wiring that doesn’t comply with current code.[5] Old wiring may fall into this category. If you wire things yourself, or ask someone to help who never has the work inspected, your short circuit claims could be denied. 

Electrical manufacturers also say that old panels can’t prevent power surges and circuit breakers.[6] If you have an old panel and don’t replace it, the company may deny your claim. 

How to File a Short Circuit Claim 

If you’ve experienced a short circuit, it’s critical to read your policy before contacting your insurance company. Ensure your policy will cover the type of damage you’ve experienced. Companies track claims and share data. 

If you file multiple claims, even if they’re denied, it could result in a denial. 

If your damage is covered, contact your insurance company and tell the agent you need to file a claim. Document damage with photos and videos, including the following:

• Burn marks around sockets and circuit breakers 
• Melted equipment 
• Charred equipment, flooring, or walls
• Broken windows
• Water damage from the fire department 

An insurance adjuster will visit your home and inspect the damage. Allow that visit and answer questions as they’re asked. Don’t admit fault, but be as honest as you can. 

If your claim is approved, you’ll be paid per your insurance policy. You can use that money to hire someone to fix the damage. 

What to Do When Short Circuits Strike 

Some short circuits are dramatic. Others are very subtle. It’s critical to understand what a problem looks like, so you can take quick action to mitigate the damage. 

A short circuit can cause the following problems:[7]

• Metallic smell in the air 
• Scent of burning plastic or rubber 
• Burned light switches 

If you notice these signs, turn off the current at the breaker. If a fire has begun, get out of the house and call the fire department. Always put your safety first. 

If the short circuit is small, experts say you should inspect the wiring and appliances for evidence of damage.[8] Any frayed parts, burn marks, or loose connections should be repaired or replaced. If the appliances were ruined, replace them. If the wiring is the issue, an electrician should fix it. 

Protect Your Home From Short Circuits 

Taking small steps can help you keep your home free from short circuits. Consider these prevention steps part of your due diligence as a homeowner. 

Skipping routine maintenance could mean a denied claim later on. 

These are good short circuit steps for homeowners:[9]

• Inspections: Have a licensed electrician review your system every 10 years. Make the requested repairs. 
• Replace old wiring: Put system upgrades at the top of your to-do list. If you do make updates, tell your insurance company and ask about discounts. 
• Investigate flickers: If your lights seem too dim or bright, or you’ve experienced signs of short circuits, discuss the problem with an electrician immediately. 

Handle Short Circuits Like a Pro 

Short circuits are both sudden and dangerous. A typical homeowners insurance policy will cover these claims, but important exceptions apply. Read your policy carefully so you know what is and is not covered. 

Maintain your electrical system and fix problems as soon as you see them. Your due diligence could keep short circuits from ever harming your home.