Last night I received e-mail from a friend who I've been discussing Y2k with. His Homeowner's Insurance policy for the year had just shown up and when he looked through it he found the following:

"Calendar Date or Time Failure -- "We" do not pay for loss or damage resulting from the failure of any electronic data processing equipment, computer program, software, media, or data to correctly recognize, interpret, or process any encoded, abbreviated, or encrypted date or time."

I quickly checked my policy for a similar exclusion (I didn't find one) and I recommend that anyone who owns a house do the same.

My friend is checking with his agent to see what the practical meaning of the above is - for example, if the power is out for an extended period due to Y2k problems at his local utility - is he covered if his pipes freeze?

I'll add the agent's response when it comes in.

-- Ed Perrault (EdPerrault@Compuserve.com), July 29, 1998

Answers

That's a good question to ask your insurance agent. I'm wondering if the power company's will be doing the same just in case there are power surges and all your electrical appliances are burned up. I know my husband's company has paid big time for power surge destruction. Also, low voltage and high voltage will do the same thing. Bardou

-- Playedbythegame (refusetogive@baloney.com), July 29, 1998.

I read somewhere the other day that a large insurance co. in Australia had sent notices to customers that they would not cover Y2K relasted problems in cars. If the malfunction caused an accident, it would be covered, but if the car simply won't start, that's not covered.

-- Sheila Ross (sross@bconnex.net), July 29, 1998.

Also, most policies will not cover damage due to riots or civil insurection. If things get ugly, insurance companies will not have to cover lots of dollar damage. Most people do not know this.

j

-- j (yada@yada.com), July 29, 1998.

Yada...Isn't this all the more reason to protect your home and family with a 12 gauge shotgun? What about a death that is related to a Y2K problem? Like medical negligence, acts of violence (murder, mayhem) would your life insurance policy cover those types of incidences? If your house is trashed, you may as well burn it down. Here in California when we had the terrible flooding, the houses that flooded were not covered (some of them) with flood insurance, but the ones that were flooded and also burned at the same time, were covered by fire insurance. Maybe this is why lawyers are sharpening their skills on Y2K lawsuits, a whole new law suit industry. Bardou

-- Playedbythegame (refusetogive@baloney.com), July 29, 1998.

Hey Played (weren't you in that movie "House Party" a few years back?) thanks for the reply. I sent it along to my friend with a suggestion that if his pipes burst due to Y2k power outages he should just light it up.

-- Ed Perrault (EdPerrault@Compuserve.com), July 29, 1998.

I guess if you have no where else to go, yes your home is worth protecting. I guess the question is, is your life and that of your families worth a house. IF things get bad, and I think larger cites are the worst place to be, if you agressively protect your property looters or those who have not prepared will think you have something they need, like food and water. You will never be able to protect yourself at all times. You would need several well armed people on 24 hour shifts. If 2 houses away looters find a less agressive target they may just burn the place after they take what they want. If fire protection is not to be had odds are the entire neighborhood will burn to the ground. Where I live houses are 15 feet apart, no fire departments will go into a riot zone to put out anything. If the house next to me catches fire and is allowed to burn with no fire protection, mine will go up as well.

This brings us to the catch-22 with insurance. Will the company cover fire caused by riot or civil insurection. Like you said the lawyers will have to sort it out after the fact. Not a comforting thought. I think the riot or civil insurection clause protects insurance companies from just about anything. I could be wrong but my policy is written in legal trash and I am sure it is in the insurance companies favior. True, if a earthquake causes a fire, your policy will cover it. At this point I am assuming the worst and if things go well I will be one happy camper.

j

-- j (yada@yada.com), July 30, 1998.

I know not how accurate this is, nor do I remember where I saw it (some reference, huh ;-) but it is interesting.

Apparently, some state legislature has declared the entire Y2K issue to be an "Act Of God" for insurance purposes in that state. Net effect: You're not covered. So sorry, you lose.

-- Paul Neuhardt (neuhardt@ultranet.com), July 30, 1998.

True, several states have passed legislation to cover their butts. This should tell everyone just one thing, "THEY KNOW THEY ARE NOT GOING TO BE READY AND THEY ARE LYING TO YOU ABOUT IT".

I just returned from a business trip. On the plane I sat next to a engineer from a major PacificNorthWest airplane manufacture. I played dumb and asked him about Y2K in general and was amazed at what came out of his mouth. It was total garbage, "No problem, no worries". I then asked him how his company was doing and got the same company line. I then informed him of my creditentials and my job as a Y2K project manager. I then called him a liar and he would not speak to me for the rest of the flight. When we landed at our destination, he said, "I'm sorry, but I really can not talk about it."

Tow the company line or get fired.

j

-- j (yada@yada.com), July 30, 1998.

<< True, several states have passed legislation to cover their butts. This should tell everyone just one thing, "THEY KNOW THEY ARE NOT GOING TO BE READY AND THEY ARE LYING TO YOU ABOUT IT". >>

Actually, there is a much easier and more realistic explaination.

Insurance companies make their living on being able to accurately forcast what will happen. For instance the life insurance companies can tell you, generally within .5%, how many people will die next year, how old they will be and what they will die of. Their only problem is that they can't tell you *which* people will die. The insurance companies can do this because they have made a long, detailed and very carefull study of history. They use that study to make predicitions and set prices. As an industry they are very good at this and have a substantial record of success and profit.

So you can see their problem with Y2K: There is no history to study, no trends to analyze and no way to predict the risk they would be taking by covering Y2K-realted problems. Forget assesing the monetary impact of Y2K problems, they can't even determine what those problems might be! Nobody can tell with any degree of accuracy.

Therefore, the insurers have taklen their money, hired people with experience in lobbying legeslatures and set about to minimize their exposure against the unknown. To them, it's simply the way business is done: underwrite no unknown risk.

-- Paul Neuhardt (neuhardt@ultranet.com), July 30, 1998.