Do You Have Falling-Satellite Insurance?

NEW YORK (MainStreet) – Last month a 6-ton NASA satellite fell out of orbit and plummeted to Earth. While human life was spared when the debris landed in the Pacific Ocean, there’s now another dying satellite to watch out for.

The German ROSAT satellite is expected to fall to Earth sometime this weekend, and debris could potentially hit land somewhere in the Americas. The German Aerospace Center says that there is a 1-in-2,000 chance that someone on Earth could be hit by debris, and property damage is, of course, also a possibility.

So if a chunk of satellite falls on your house, would you be covered by your homeowner’s policy?

“Most homeowners should be covered,” says Ron Reitz, president of the Quality Claims Management Corporation. “The most popular homeowner’s policy is the HO3 or HO5, which are all-risk policies that cover you for anything that would happen.”

Some homeowners may choose to exclude certain events from their coverage, but Reitz says there’s no exclusions for falling objects, which would surely be the relevant classification for a satellite falling from space.

The other popular type of homeowner’s insurance is the HO2, or “named peril” policy. That tends to be cheaper, because it only covers the events specifically named in the policy; however, Reitz says that falling objects are among the perils named there.

Robert Hartwig, president of the Insurance Information Institute, agrees that the vast majority of homeowners will be covered by their policies.

“Falling objects are covered, from something as everyday as a branch falling off a tree to a piece of satellite falling from the sky, or even a meteor,” he says. “In theory, there could be some types of property policies that cover fire only, for instance, but that’s a small number of policies.”

If debris hits your car, the story could be a little different. Hartwig says that someone with comprehensive coverage on their vehicle would be in the clear, but someone who only has the minimum coverage required by law would only be covered against actual traffic accidents; other damaging events, from water damage to falling objects, would not be covered.

But even if your car or home isn’t covered by the right policy, that doesn’t necessarily mean you’re out of luck as far as collecting compensation. The German government would still be liable for any damage that happens to you or your property, says Henry R. Hertzfeld, professor of space policy and international affairs at George Washington University.

“According to the Outer Space Treaty and the Liability Convention, both of which Germany has ratified, the German government is absolutely liable for any damage to property or persons on the Earth from that space object,” he explains. “In other words, they must pay for the damage caused by that satellite or its pieces.”

He adds that liability would also be shared by the government of whatever country was the site of the initial satellite launch, which in this case is the United States. (Germany does not have launching capabilities.)

Of course, it would be easier to just collect money from your insurance company and then let them fight it out with the German and American governments. But if your property isn’t covered, or if a member of your family is harmed by a falling satellite chunk, you still have legal options that you can pursue yourself.