If you build your own cables, and you are the worst craftsman in the world, and they burn down your house, AND the insurance company can prove that fact with forensic evidence beyond reasonable doubt (this is damn tough to do, which is why so many arsons are not prosecuted)--
THEY'D STILL HAVE TO PAY THE CLAIM.
You wouldn't end up in court-- you are the insured, and it was an accident. If your buddy built you the cables as a gift, he wouldn't end up in court, either. If you bought them from someone with an express or implied warranty of merchantability, or suitability for a given task, that someone is in trouble, and they better have liability insurance.
Things like this happen all the time. People ignorantly splice copper wire into aluminum wire and start fires. People clean their oil furnaces with cigarettes dangling out of their mouths. People put rags soaked with furniture stain in sealed bags. People put 100watt bulbs in recessed light fixtures designed for 40watt bulbs. People paint rooms with highly volatile primers and no ventilation, then get blown out the door in a fireball when they flip off the 1901-vintage light switch. All stupid acts committed by the insured, all covered without much of a second thought, no court, no arbitration. There is no exclusion for stupidity or error under your policy.
Husbands burn down their houses and their wives collect on the policies in domestic violence cases. People put their own roofs on, incorrectly, and insurance pays for the water damage. An accidental fire is almost always covered (I wanted to just say always, not "almost always", but there is never an always)
Make no mistake about it, you will become the source of much laughter round the old water cooler or at a golf tournament or something among adjusters- we laugh at insureds and claimants all the time,it's one of the few redeeming qualities of the job, but the loss will be covered. You might have a tough time getting insurance after the fact, and you will pay more for several years thereafter, too.
With all this hypothetical stuff, we can't lose sight of important facts, however-- If, into the first example, we inject that you were testing powercords that you built, and that you derive some income, however meager, from selling cords like this on Audiogon, then this would be considered a business pursuit. The fact that it is a business pursuit can cause problems for you with standard homeowner's policies and result in exclusion of the part of the premises used for such business pursuit from coverage. So, if you are burning in cables in your garage for Audiogoners at $15 a pop, and your cable burner decides to try its hand at house burning, you may find that your garage, which was being used for a business pursuit, is not covered in the resulting claim.
You know how you'd find out exactly what the limitations of your specific homeowner's policy are? Hmmmm. How would we all find this out... There should be something we could read that would tell us if we had limitations for business pursuits and what exactly those limitations are.... It WOULD be nice to know if business pursuits would limit your recovery for all items or just those used in the business-- if it was just the cable burner at risk, then no big deal, but if it's the cost of the whole garage...
Yes, that's right, I'm telling you to read your policy again. Damn broken record...
Look, insurance policies are contracts. Both sides have conditions and duties. Contrary to popular belief, one of the biggest duties the insurance company has is to act in good faith. They can't hide coverage from you. They have to reply to your correspondence in a reasonable amount of time. They have to tell you why they are or are not paying for something, and they cannot just deny claims without proper investigation, lest they risk a bad faith lawsuit where you could collect not only actual, but punitive damages (recently capped at 9x the actual loss by a court decision). The easiest thing in the world is for an adjuster to pay a claim. Denying them is 10x the work, and if you have a 75% case for denial, often the claim is paid anyhow because the company doesn't want the legal battle or the bad PR. The fact of the matter, however, is that while most everyone has insurance, and is therefore contractually bound to the terms of the insurance contract (that's all a policy is), 99% of people have never read the contract. They don't know what they're supposed to do or what they've purchased. This is not smart. People read disclosures on rental car contracts. They read the odds on lottery tickets, but they pay thousands a year for insurance and don't know what their duties are under the contract and what benefit they get from it.
Believe me, you don't want to be standing in that smoking hole in the ground wondering what coverages you have for all of your stuff and whether the Ebay business you run out of the spare room for fun money is going to mean you only get 3/4 of your claim paid.
I'll get off the soapbox now.
