Coverage for Paranormal Activity? It Depends on the Specifics

April 30, 2012

One of the biggest stories in Toms River, N.J., in recent weeks involved an alleged haunted house in the neighborhood.

According to local reports, Michele Callan and her fiance Josue Chinchilla had moved into a home in Toms River in March and soon began to experience a range of paranormal activities.


As a news report from ABC News shows, the distressed couple allegedly endured living room lights that turn on by themselves, a vase that falls over when no one is watching, a feeling of being tapped on the shoulder when no one is around, and a raspy voice that whispers, “Let it burn.”

The couple have since moved out and sued the landlord, claiming they could no longer endure the ghostly activities in the house and want to recoup the deposit. The landlord, in turn, counter-sued the couple, saying the lawsuit will frighten away new tenants or buyers and hurt the house’s value.

In homeowners’ or renters’ insurance coverage, a lot would depend on who or what causes the damage.

“There is nothing in an insurance contract that specifies an ‘exclusion’ or ‘inclusion’ from paranormal activity,” Loretta Worters, vice president of Insurance Information Institute in New York, told Insurance Journal.

She noted that if there is a fire and the person’s property is damaged, and if the renters had bought renter’s insurance, then there would be coverage.

But if a fire is found to be arson and if the renters are found to be responsible, then they wouldn’t have coverage, as arson is a criminal act, according to the I.I.I.

If the homeowner carries homeowners insurance, there would be coverage in case of fire, unless of course it is proven as arson and the homeowner is the one found to be the perpetrator.

When it comes to breakage, the insureds may be out of luck regardless of whether the damage is caused by a living person or a ghost.

“If there was, say, an expensive vase that mysteriously broke, there would be no coverage, regardless if there was paranormal activity,” Worters said. “Breakage is not covered under a standard homeowners policy.”

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