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Fire Insurance Coverage

By September 13, 2021September 29th, 2021Home
Fire insurance covers losses to the house, and any personal property within it, from damage because of a fire. In most cases, homeowners insurance will be enough to protect against fire damage, and the typical home insurance policy does include fire protection.

However, homes that are located in areas that are at a high risk of fire might not be able to qualify for standard fire protection, and homeowners will need to purchase separate fire insurance coverage to protect their property.

Keep in mind that each insurance company evaluates risk differently, and just because one insurer denies you, it does not mean all of them will. Work with an insurance agent who can help you find a company in your area that is likely to offer you coverage.

If your home is not at high risk, it will most likely be sufficiently protected from fire through a homeowners policy. And here is how these policies will protect your home:

 

Does homeowners insurance cover fire damage?

Yes. For most people, fire insurance coverage is included in their standard homeowners insurance policies. It is one of the so-called “named perils” that are listed in most policies. And, coverage is not limited to items that are burned up. Some of the damage to homes and properties is caused by smoke, which can ruin walls, furniture, and other things, and this will also likely be covered under a typical home insurance policy.

 

How does a fire insurance payout work?

Fires are covered up to the policy’s total limit, minus any deductible. Here is an example: your house is worth $250,000, and your belongings are worth an additional $100,000. If you had $350,000 worth of homeowners insurance with a $1,000 deductible, you would receive $349,000 from the insurance company if your house burned down completely and everything inside was destroyed.

If you had only $300,000 worth of coverage, that is all you would receive, and you would have to make up the difference out-of-pocket. If you had $450,000 of coverage, you would still only be paid the $349,000 that the home was worth.

 

What does a fire insurance policy cover?

Here is a breakdown of the coverages in a standard home fire insurance policy:

Dwelling Coverage: This coverage will reimburse the cost of repairs for a partially damaged house, or if the house burns to the ground, it will pay a lump sum (up to the policy limits) for the home. The coverage includes smoke damage to the house itself. Payment is usually either for the actual cash value or replacement cost.

Personal Property: Any of the belongings within the house—furniture, clothing, valuables—will be replaced under personal property coverage. High-value items may have limits set on each item. For instance, certain jewelry should be listed with individual coverage amounts for each piece on an endorsement.

Liability Protection: If a fire on your property spreads to a neighbor’s property, liability insurance does cover fire damage and will protect against lawsuits.

 

Can I buy a standalone insurance policy for fire protection?

Yes. Some insurers will provide policies that primarily or exclusively cover damage related to a fire. Some homeowners buy them in addition to the coverage from a standard homeowners or renters policy. These standalone policies are usually referred to as “dwelling fire” coverage, and they protect against fire, smoke, explosions, and sometimes even wind.

Homeowners sometimes purchase a dwelling fire policy to supplement their existing homeowners coverage when they live in an area that is vulnerable to forest fires, or they have had a fire loss in the past and want extra peace of mind. Or they might add the coverage to a secondary residence or vacation home, which can be expensive to insure fully.

 

Does Renters Insurance Cover Fire?

Renters insurance includes several types of coverage, and each one covers fire differently. Fire is covered under the contents or personal property portion on your renters insurance policy. This means you have coverage for any belongings (personal property) that are lost as a result of a fire.

Most of today’s renters policies come with replacement cost instead of actual cash value, which means you will be paid the amount necessary to replace the property, not just the current depreciated value.

Renters insurance also has liability coverage. If you accidentally cause a fire through your negligence, renters insurance liability coverage will pay any third party who is injured or suffers property damage as a result of that negligence. For example, the insurance provides coverage for things like a neighbor with smoke inhalation or damage to the building.

 

Talk to an expert to learn more about fire insurance coverage

Talk to an insurance professional at White Cloud Insurance to learn more about fire insurance coverage. Let us find a policy that gives you the best possible protection. White Cloud Insurance is an independent insurance agency in Miami, Florida, representing some of the finest and most reputable insurance companies in the industry.