Contingency Insurance Definition

Updated March 21, 2017

Contingency insurance, sometimes erroneously referred to as secondary insurance, is a type of speciality insurance that provides coverage for specific risks not sufficiently covered by an insured's primary insurance policy.

Contingency Insurance Definition

Contingency insurance is specialised coverage that focuses on a certain risk. Contingency coverage is most common in homeowner's insurance.

Purpose of Contingency Insurance

For risks that are not typically covered by traditional homeowner's insurance, contingency insurance acts as a "backup" to primary insurance. This is why contingency insurance is often called secondary insurance, though it is not a form of secondary coverage.

Contingency Coverage

Risks that are specific to a homeowner's location, situation, or property are protected by contingency coverage.

Events Typically Covered

Tornadoes, floods, and house fires are three common residential risks that contingency insurance covers. Rotting or cracking foundation and faulty wiring are examples of property risks, and dog bites would be an example of situational risks for a homeowner with a large dog.

How to Get Contingency Insurance

Most homeowners seek contingency insurance through a different insurance company separate from their primary homeowner's insurance. Some insurance companies offer additional contingency coverage that can be added to primary policies as well.

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About the Author

Carrie Ferland is a practicing civil litigation defense attorney in the Philadelphia Area. As an author, her work has been featured in various legal publications for over 10 years. Ferland is a 2000 graduate of Pennsylvania State University and completed her Juris Doctorate and Master of Business Administration with the Dickinson School of Law. She is currently pursuing a Doctor of Philosophy in English.