Will a Pellet Stove Increase Your Homeowner's Insurance?

Written by James Hirby and Fact Checked by The Law Dictionary Staff  

As fuel costs continue to rise across the country, pellet stoves are becoming ever more popular. Although these devices can cost between $2,000 and $4,000, they can more than make up for this initial cost by dramatically reducing the need for a traditional heating system within a home. If you live in a relatively small house in a cold part of the country, you could save more than $1,000 per year simply by using a pellet stove to heat the bulk of your home. To further reduce your costs, you could either keep your main thermostat turned down to 55 degrees or completely disconnect your "traditional" liquid-fired home heating system.

The environmental benefits of pellet stoves are unclear. While it's true that the fuels for these devices can be sourced locally, some pellet stove models are considered to be dirtier than the traditional heating systems that they often replace. If you use propane or another form of natural gas to heat your home, your pellet stove purchase may actually increase your home's carbon footprint. By contrast, your pellet stove is liable to be cleaner than the coal-fired home heating system that it replaces.

Your pellet stove may also increase your out-of-pocket costs for homeowner's insurance. This is because homes that feature pellet stoves are significantly more likely to suffer fire-related damages than structures heated using traditional means. In fact, even properly-used pellet stoves can cause structural damages over long periods of time thanks to their propensity for emitting belches of smoke.

While you can dramatically reduce the likelihood of a fire by following all of the warnings printed in your stove's instruction manual and contracting a licensed professional to install the device, you can't prevent a freak accident or manufacturing-related malfunction from damaging your home. As such, your homeowner's insurance company is likely to levy a monthly surcharge on your policy. This could come as either a flat up-charge or an official "rider" with its own set of terms and conditions.

If your insurance company subjects you to such a rider, you may be required to meet certain terms and conditions. For instance, you may be asked to have your stove inspected for defects or wear on an annual basis. You may also need to maintain installation and service records. If you don't adhere to these terms, it's entirely possible that your insurance company will deny any claim that you file for stove-related damages.

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