Fire Insurance

When fires get out of control, the resulting damage can be both devastating and costly. A fire can occur in your house, at your business, or out in nature, which can impact any of your property. To protect your investments against a total loss due to fire, it's critical to make sure you're set up with enough fire insurance.

Fortunately, an independent insurance agent can help you find the right fire insurance for your needs. They'll help you get equipped with ample protection for all your property, including your home, business, and vehicle. But first, here's a deep dive into fire insurance.

What Is Fire Insurance?

To properly protect yourself and your property against losses related to fire damage, you need either home insurance or a dedicated fire insurance policy. Fire insurance is available as a separate product, but fire coverage is already included in standard homeowners insurance, business insurance, and car insurance. 

Stand-alone fire policies guard against fire and lightning damage as a priority. But fire coverage is included in so many policies because it’s one of the most common and costly threats to insurance customers of all kinds.

In fact, fire is the original peril that certain types of insurance, including homeowners insurance, were designed to protect against. Fire insurance can pay to repair your personal property or rebuild a structure, like a home or office building. An independent insurance agent can help you review your existing coverage to make sure you have enough fire protection.

Property Fire Stats

Fires may be more common and costly than you might expect. Review these recent fire stats to better understand why the fire protection included in your policy is so important.

Noting just how big of a threat fires are, it's easy to see why it's critical to be prepared with the right coverage. If you want to add additional fire coverage to your policy, you can work with your independent insurance agent to do so. 

Fire coverage may also be required by your mortgage lender if you don’t already have it. Also, in certain areas that are prone to wildfires, such as California, residents may be required to purchase additional fire policies.

How Does Home Insurance Cover Fire?

While separate policies that cover fire and lightning damage are available, fire coverage is already included as part of your standard homeowners insurance, business insurance, and car insurance. This fire insurance covers damages from fire and lightning and provides you with coverage for your dwelling, personal property, and additional living expenses. 

The fire portion of a homeowners policy works like this:

• May provide coverage for up to 50% of your home’s value against fire damage.
• Coverage includes the dwelling as well as personal property.
• Coverage kicks in after you’ve met your policy’s deductible.
• Coverage can pay for additional living expenses or loss of use, including the cost of a temporary residence if your home is unlivable after extensive fire damage.
• Some policies cover the original replacement value of fire-damaged items, while others factor in depreciation, known as actual cash value coverage.
• Additional replacement value riders can be purchased to protect the original value of any fire-damaged items.

Your homeowners policy also typically pays for debris cleanup after a fire, as well as water damage that occurred from putting the fire out. An independent insurance agent can review your homeowners insurance policy with you to make sure you’re satisfied with the level of fire damage coverage it provides.

A Deeper Breakdown of Fire Coverage Under Homeowners Insurance

Want a closer look at how your homeowners insurance covers fire in all aspects? Here's a more detailed breakdown.

• Dwelling coverage: Fire protection in a home insurance policy protects the structure of the home against damage or destruction by fire. Dwelling coverage also applies to built-in appliances, flooring, and attached garages and decks.
• Additional structures coverage: Depending on your policy, you're likely to also have coverage for detached structures like sheds.
• Personal property or contents coverage: Your personal property, like clothing, furniture, silverware, etc., is also covered by your home insurance against fire damage and destruction. Contents coverage is usually 50% to 75% of your home's total insured value. Some policies will pay for the original replacement cost of items, while others only reimburse for the current value.
• Loss of use coverage: Homeowners insurance also provides coverage for temporary housing if you're forced to live elsewhere while awaiting repairs after a fire. Hotel stays, additional gas mileage, meal takeout, and more are often covered. Coverage in this section is often limited to 20% of your dwelling coverage.

An independent insurance agent can further explain all the ways in which your homeowners insurance protects against fire damage losses.

What Kinds of Fires Are Covered Under Homeowners Insurance?

Home and business insurance policies cover fires of a “hostile” nature, or in other words, fires that arise in areas where they’re not supposed to be. A few examples of fires covered by fire insurance include:

Certain homeowners insurance policies will cover arson if you can prove that the fire was started by a third party. However, you'll want to review your specific coverage with the help of your independent insurance agent to be sure.

What Doesn't Fire Insurance Cover?

"Friendly fires,” or fires that are maintained where they’re supposed to be, are typically not covered by fire insurance. Fires in your fireplace or your outdoor grill may not be covered, since they’re not hostile in nature.  

Otherwise, fire insurance does not provide coverage for any other type of disaster beyond fire and lightning damage, including:

If a policyholder is sued by a third party for a claim of personal property damage or bodily injury, the liability insurance section of your homeowners policy would help pay for related expenses. Your independent insurance agent can further explain what’s excluded by fire insurance, and make sure you get equipped with any protection you feel you may be missing.

Make Sure Your Fire Insurance Coverage Is Sufficient

Most homeowners insurance policies cover structural damage and loss of personal property, or contents, up to a value of about 50% of the covered value of the home. So if your home policy provides $200,000 in coverage, the personal property portion would provide up to $100,000 in coverage for personal belongings.

The actual compensation a tenant may receive for a covered loss depends on several factors, including the type of policy they have and its deductibles. While some policies only cover the current depreciated value of your personal belongings, a more expensive replacement value policy will cover the full original value.

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Things to Keep in Mind When Shopping for Fire Insurance

It's a good idea to make an inventory of all your belongings and bring it with you when you meet with an independent insurance agent. Most policies have caps on coverage for different kinds of belongings. If you own expensive items such as jewelry, artwork, or electronics, you may need to purchase a separate rider that lists your valuable items and provides additional coverage for them.

Along with your home and personal belongings, your fire insurance coverage will typically cover additional structures on your property, such as a garage or tool shed. Many policies also provide coverage for temporary housing if your house is uninhabitable for some time due to fire. Loss of use coverage can also reimburse you for other related expenses during this time, such as takeout meals, dry cleaning, or additional gas mileage to commute to work.

When You Should Add More Fire Coverage

Homeowners insurance does provide generous coverage for fire damage, but there are certain cases in which you might want to consider adding a stand-alone fire policy or increasing your policy's limits. These include the following:

• If you have expensive property: If you have a lot of expensive items, like jewelry, collectibles, fancy electronics, furs, etc., you may want to consider adding riders or endorsements to increase your personal property fire coverage limits.
• If you have an older home: If your home is older and more susceptible to fire damage, you might want to look into ordinance or law coverage to protect against building code changes over the years.
• If your home is customized: If your home has undergone a lot of custom upgrades, you might want to look into adding extended replacement cost coverage to your policy to cover the cost of custom materials and extra labor for repairs.
• If you have a large family: If you have a large family, the built-in loss of use coverage included in your home insurance might not be sufficient for your needs. You may want to work with your independent insurance agent to increase these limits.

An independent insurance agent can discuss your needs with you and help you determine if increasing your policy's limits or adding an extra fire insurance policy is the right choice.

When Are Fire Claims Denied?

There are a number of reasons why a home fire insurance claim may be denied. Usually, any fire that is deemed intentionally set by the homeowner or someone in the household will result in a claim denial. 

Additionally, if the insurance company finds that the fire damage was preventable, the company may not pay your claim, whether or not the fire was set intentionally. The insurance company may also deny the claim if:

Ask your independent insurance agent to review your fire insurance with you to determine all the potential scenarios in which a fire claim may be denied by your carrier.

Tips for Filing a Fire Insurance Claim

Hopefully, you will never need to file a claim for a devastating fire in your home. However, you may need to file a fire damage claim at some point, and you probably want the best possible return on your insurance investment. 

To make the most effective claim and get accurate compensation quickly, complete a thorough assessment of the damage and loss. Gather as much information as possible about the fire, including:

Your independent insurance agent can provide more tips for filing an insurance claim, or even file a claim directly through your carrier for you.

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How to Get Fire Insurance for Homes That Don't Qualify for Coverage

If you live in a particularly high-risk area for fire or live too far from a fire department, you might be denied fire coverage by home insurance companies. States that are especially prone to wildfires, like California, often fall into this category.

These homeowners can look at policies through the Fair Access to Insurance Requirements (FAIR) Plan, which offers a government product available in most states. While these policies are often cheaper, they typically offer less sufficient coverage than that provided by home insurance. The positive side of these policies is that they're offered to homeowners who don't qualify for other forms of fire insurance.

The Benefits of an Independent Insurance Agent

Independent insurance agents have access to multiple insurance companies, so they're free to shop and compare quotes and policy options for you. Ultimately, they'll get you matched to the fire insurance that delivers the right blend of coverage and cost. And down the road, your agent will be there to help you file fire insurance claims or update your coverage as necessary.

Frequently Asked Questions About Fire Insurance