This is my first post, although I've been lurking around for some time. I want to thank everyone for the vast amount of information I have gained from this forum. You have all been most helpful.

I don't know if this has already been posted ... I apologize if it has. I found it interesting as I am one of their insureds. I pulled this off of Statefarm's site today. It appears that they are anticipating possible problems. Note the fourth paragraph, "As claims arrise out Y2K-related situations, ..." Is this standard jargon or are they indicating something more?

http://www.statefarm.com/about/y2kcover.htm

Is Y2K Covered?

No Y2K Changes in State Farm Policy Language

State Farm is making every reasonable effort to prepare for potential Y2K situations, but those efforts do not include changes to our insurance policy language. That means the existing policy language, applied to the facts of loss, will determine whether or not a specific claim is covered.

As claims arise out of Y2K-related situations, State Farm will examine them one at a time, based upon the existing policy language, the coverage purchased, and the facts of the policyholder's loss. How do you know what types of losses are covered under your policies  from ANY causes? Your State Farm agent can discuss your policy coverages and assist you with your specific Y2K questions.

For example, let's say your heating system or thermostat fails as a result of Y2K, due to either an internal breakdown or an interruption in utility service. The property that fails  the thermostat, furnace, etc.  typically is not covered. However, the damages to your home if your pipes freeze and burst as a result of the heating problem are generally covered if you have taken reasonable steps to prevent your pipes from freezing. Other policy provisions regarding occupancy and protection of property may also apply, depending on the circumstances of the loss. Commercial policies vary as to the coverage provided for these types of losses; each policy must be addressed individually.

Similarly, if your refrigerator or freezer stops running due to a mechanical failure or power outage (not including a pulled electrical plug or a turned-off power switch), your State Farm homeowners policy provides coverage for spoiled food. However, you need to take reasonable steps to protect your food if the appliance stops running, or the coverage is void.

What if you have an accidental fire, and you are unable to call the fire department because of Y2K, or your fire department is unable to take the call? The inability to place the call would not lessen the protection from your State Farm homeowners policy. Again, you must take reasonable means to protect your property from further loss, if possible.

If your car will not run due to a Y2K incident, physical damage coverage would apply as stated in your car policy. Most car policies contain language in the physical damage section which excludes physical damage coverage for mechanical or electrical breakdown or failure. If your car will not run due to a Y2K incident, it would be considered a mechanical or electrical breakdown or failure. Therefore, the breakdown or failure due to a Y2K incident would not be covered.

If the applicable car policy has emergency road service coverage, the cost of towing your car to the nearest place where the necessary repairs could be made would be covered, as emergency road service coverage is not subject to the exclusion noted in the previous paragraph.

If a traffic signal malfunctions due to a Y2K incident, and an accident occurs, the car policy will apply just as it would today if a traffic signal malfunctioned and an accident occurred.

It might be a good time to locate your insurance policies and read through them. If you have any questions about the protections provided by the policies, call your State Farm agent.

This is a "Year 2000 Readiness Disclosure" as that term is defined in the "Year 2000 Information and Readiness Disclosure Act of 1998" (P.L. 105-271) (U.S. law).

-- (angelface@lurkingaround.com), June 02, 1999

Answers

State Farm has taken a fairly liberal position in regard to insuring home losses. But you might want to consider:

(1) Preparation might well mean that you have no losses to claim. This is the ideal situation.

(2) If there are losses, it might be a while before you are paid, and what you are paid may not do a whole lot toward fixing the problem in a timely manner. If almost everyone in your hometown has burst pipes, it will take a while to order the parts and have them fixed. Meanwhile, you are living without water.

(3) (Worst Case) State Farm might not be in business when you try to make your claim.

-- Mad Monk (madmonk@hawaiian.net), June 02, 1999.

Others may be able to dig up and post the story, but State Farm was sued recently (past year or two) because of alleged misleading language in its policies. I believe it was a class-action lawsuit filed by residents of California, in response to non-covered claims resulting from earthquake damage.

Regardless, last year, State Farm issued a revised brochure for customers who had purchased home insurance. My husband and I received one, and after reading it through, we cancelled our policy with that company. We had been customers for nearly five years.

:)

-- FM (vidprof@aol.com), June 02, 1999.

I am insured against almost any calamity known to man (I think). Heck, nowadays they're even selling insurance to cover the things your *other* insurance doesn't. It is all just throwing good money after bad. Chances are high they will try to weasel out of paying no matter what. That's how they make money. Y2K, by definition, won't be classified as an act of God.

-- Gia (Laureltree7@hotmail.com), June 03, 1999.

Don't know what kind of problems you may have had with State Farm FM, but I've got to say, State Farm is one of the best companies I've ever dealt with.

Property damage deals with accidental physical loss. Y2K is not accidental, it is a known problem, a forseeable event. State Farm is not changing any policy language to exclude Y2K, they will still pay for accidental direct physical loss. Sounds like a pretty upfront stance on their website.

mb in NC

-- mb (mdbutler@coastalnet.com), June 03, 1999.