Remember “National Lampoon’s Christmas Vacation?” The Griswold's pretty much destroyed and almost burned down the house. Kiplinger’s rounds up several holiday mishap scenarios that may – or may not - be covered under your homeowners insurance, as well as tips to avoid these situations.
• You attempt to roast chestnuts on an open fire and accidentally burn down the house—COVERED. Standard homeowner’s policies cover damage due to fire. Make sure, though, that your policy will cover the cost of rebuilding your home and replacing all of your belongings.
• Your outdoor light display sets your trees and bushes aflame—COVERED. Trees, plants and shrubs are covered under standard homeowners insurance when damaged by fire. However, most policies limit coverage to 5% of your dwelling coverage—up to about $500 per item.
• Your sewer backs up because you pour grease from your fried turkey down the drain—NOT COVERED. It actually doesn’t matter how your sewer backs up. Most homeowner’s policies do not cover damage caused by sewage backup; you typically have to purchase this coverage separately for an additional $40 to $50 a year.
• A squirrel jumps out of your Christmas tree, then your dog chases it and destroys your belongings—NOT COVERED. If you’ve seen the aforementioned “National Lampoon’s Christmas Vacation,” then you surely remember this scene from the movie.
• Thieves snatch all the gifts Santa left under the tree—COVERED. Most homeowner’s policies provide coverage for possessions at 50% to 70% of the dwelling’s coverage. So be sure to talk to your insurance agent about supplemental coverage for certain expensive gifts.
• The fur coat you wanted to surprise your wife with disappears from the back seat of the car—MAYBE. Whether you’re covered depends on the value of the coat and whether you elected to have off-premises coverage for your belongings. Your policy should provide coverage if your belongings were stolen from some place other than you home—unless you opted not to have off-premises coverage.
• The delivery man slips on your icy walkway and breaks his arm—COVERED. Most homeowner’s policies provide about $100,000 worth of liability coverage, which can protect you against lawsuits for bodily injury or property damage. Your policy should also provide no-fault medical coverage to pay the medical bills of someone injured on your property.
• Things get out of hand at your holiday party and you punch a guest—NOT COVERED. Homeowner’s liability coverage won’t protect you if you intend to hurt somebody. Also be aware that 37 states have laws that allow social hosts to be held liable if a guest drinks too much, gets in an accident and injures others.