Does Homeowners Insurance Cover Gas Leaks?

Last Updated on October 10, 2022 by Andrew Lee

Most homeowners insurance policies cover gas leak explosions. Also, they pay for gas line repairs that result from a covered peril, such as a storm, fire, or lightning.

Though homeowners insurance covers gas leaks under many circumstances, insurance companies exclude certain events. Firstly, homeowners insurance policies are designed for sudden, accidental events. A slow gas leak that damages appliances may be excluded.

Secondly, homeowners insurance providers often deny claims for gas leaks from old appliances that have malfunctioned due to a lack of maintenance. In addition, exclusions exist for improperly installed connections and leaks caused by uncovered perils, such as floods, earthquakes, and mudslides.

To prevent a leak that is excluded from coverage, be sure to have installations completed by a professional. Should an issue occur, the installer will fix the problem and have insurance coverage for damage. In addition, keeping current with routine maintenance prevents leaks from units due to neglect.

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How Much of the Gas Leak Expense Is Paid for by Insurance?

Assuming the gas leak occurs because of a covered peril, the insurance company pays for all expenses, minus your deductible, provided the expenses remain within the policy limits. For example, if a gas leak caused $3000 in damage and you elected a $500 deductible, your insurance pays $2500, and you are out of pocket just $500.

However, an explosion could wreak far more damage, potentially destroying your home. Explosions can also damage your neighbor’s houses, leaving you liable for that destruction. Your policy would cover any costs associated with damage to your home, assuming you elected appropriate policy limits for your domicile. 

Any damage caused to surrounding properties is paid for under your policy’s liability protection. This coverage compensates anyone with a legitimate legal claim against you for a covered event. Typically, homeowners policies have $300,000 liability limits. If you have a lot of home equity or other assets, you want to consider increasing your liability limits or taking umbrella insurance.

What Is Umbrella Insurance?

Umbrella insurance is a type of coverage that kicks in when a claim exceeds your standard coverage. For example, if a gas explosion caused $500,000 of damage to your neighbor’s home and your homeowners liability limit stood at $300,000, you would be on the hook for $200,000 out of pocket. In this case, umbrella insurance would cover the difference, protecting your hard-earned assets.

Umbrella coverage comes in increments of $1 million. Because umbrella claims are rare, this type of insurance is surprisingly affordable.  

Are There Other Options for Coverage if a Gas Leak Is Excluded by Homeowners Insurance?

Your homeowners insurance may not be the only option if you suffer financial hardship due to a damaging gas leak.

If the problem stemmed from an appliance, you probably have some protection from the warranty. Leaks should not occur during the warranty period. If they do, it’s likely you have a strong claim against the manufacturer.

Also, many homeowners opt for a home warranty. Home warranties cover issues excluded from home insurance policies, such as appliance failures. If you have an extended home warranty, it will provide compensation if the problem comes from an appliance.

Homeowners may also have recourse against the utility company if the leak occurs in a line it installed. In addition, gas leaks in the utility company’s piping are its responsibility. Generally speaking, the homeowner bears responsibility for leaks in pipes up to the property line.

Gas leaks can result in tremendously expensive claims. Should you have an explosion, your home insurance will cover your damages and any liability claims of your neighbors. To prevent gas leaks, be certain that you have lines professionally installed and properly maintain them.

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