insurance

Special Form Coverage

Property insurance that covers all risks of physical loss except those specifically excluded in the policy. This 'all-risk' approach provides broader protection than basic or broad form coverage by covering any peril not explicitly listed as an exclusion.

Example

“Jennifer chose special form coverage for her home because it would protect against unusual risks like falling objects or ice damage that weren't covered by her basic policy.”

Memory Tip

SPECIAL = 'Super Protection Except Certain Items And Listed exclusions' - it covers everything except what's specifically excluded.

Why It Matters

Special form coverage protects you against unexpected perils you might not think to insure against, providing peace of mind and potentially saving thousands in uncovered losses. The broader coverage is especially valuable for expensive homes or belongings where even uncommon risks could cause significant financial damage.

Common Misconception

Many people think special form coverage protects against everything, but it still contains important exclusions like floods, earthquakes, and intentional damage. Reading the exclusions section is crucial because 'all-risk' doesn't truly mean 'all risks.'

In Practice

Mike's home has special form coverage with a $300,000 dwelling limit. When a small plane makes an emergency landing and damages his roof, causing $25,000 in repairs, his insurance pays the claim even though aircraft damage isn't specifically mentioned in his policy. If he had basic form coverage that only covered named perils like fire and hail, this unusual loss would not be covered since aircraft damage wasn't on the list.

Etymology

The term 'special form' emerged in the 1980s when the insurance industry standardized policy forms, with 'special' indicating the most comprehensive level of coverage available.

Common Misspellings

Speical Form CoverageSpecial From CoverageSpecail Form CoverageSpecial Form Coverge

Related Terms

Broad Form Coverage

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