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Tricky Terminology: What Is Consequential Damage & How Can It Void Your Claim?

When it comes to insurance claims, there are a lot of confusing terms that policyholders may not be familiar with. It makes filing a claim more complicated than it needs to be. Awareness of the tricky terminology often used in the insurance world is critical.

One term you might have heard is “consequential damage.” What does this mean? And more importantly, can it void your insurance claim?

Accidents happen. And when they do, you must know what damages you can claim. But even more importantly, you should be aware of what could potentially void your entire claim. Powerhouse Insurance will discuss what consequential damage is and how it can impact your insurance claim in this article.

What is Consequential Damage?

Consequential damage is any loss or damage that is the indirect result of an event covered by insurance. For example, if your home gets damaged in a fire, and as a result, your furniture also sustains damage due to smoke and water, the damage to your furniture would be considered consequential.

In a nutshell, it’s any damage that is not direct. It can include loss of use, diminished value, and more. If you’re dealing with an insurance company after an accident, it’s essential to be aware of this term and understand how it could impact your claim—wondering if you have a valid claim at all? Read on to understand the coverage of your insurance policy.

Coverage in Insurance Policies

In most cases, consequential damage is not covered by insurance policies. It means that if you experience consequential damage due to an insured event, you can’t get compensation from your insurance company for this damage.

There are some exceptions to this rule, however. Some insurance policies may provide coverage for consequential damage under certain circumstances. For example, some homeowners’ insurance policies may provide limited coverage for significant damage caused by a fire.

Anything not explicitly listed in your insurance policy as being covered may fall under consequential damage. And if you’re unlucky enough to experience it, your claim could be denied entirely. It’s important to know what these exclusions are before you make a claim.

Consequential damage can be a tricky topic and one that often voids insurance claims. Before renewing your policy, make sure to check with your insurer whether or not they cover this type of damage.

Ending Note

So, consequential damage is any secondary or indirect damage that results from an accident. It could be anything from income loss to additional property damages. If you’re unsure about whether an accident resulted in consequential damage, don’t worry! Powerhouse Insurance serving Live Oak will help you assess the situation and provide you with the information you need to make a claim. We understand that accidents happen, and we offer our services to ensure you get the compensation you deserve. Contact us now for a free quote, and let us help you through this difficult time. Thanks for reading!