Types of coverage, operation, limits


Most standard home insurance policies come with coverage that protects your home against fire damage. You can also purchase separate fire insurance to supplement your existing coverage if you have a second home or live in an area more vulnerable to wildfires.

In California, for example, more than 2 million properties are at high to extreme risk of wildfire damage, according to Verisk, an insurance risk data analytics company. Other states with high levels of wildfire danger include Texas, Colorado and Arizona.

What is fire insurance?

Fire insurance pays for repairs and replacement if a fire damages your home, says Brian Greenberg, founder and president of Insurer, an insurance comparison platform. It’s probably already included in your home insurance policy, but can be purchased as stand-alone coverage if needed.

Although home insurance is not legally required, most mortgage lenders require you to have it. Either way, having a cover is always a good idea to protect what is probably your biggest investment from fires.

How does fire insurance work?

“Fire insurance covers a variety of risks and perils, including those associated with fire, smoke, water damage and other types of damage,” says Greenberg. As long as a peril listed in your policy caused the fire, your home insurance will cover the damage.

Here are some of the risks covered by standard home insurance:

Amounts of fire insurance cover

If a fire damages your home, your insurance provider will pay either the replacement cost value or the actual cost value to replace or repair your property.

Cost new coverage pays for the amount it would take to rebuild or replace your home or personal property to current cost standards. Unlike actual cost coverage, it does not take into account depreciation factors such as the age of your home. For example, if your kitchen is destroyed by fire, with replacement cost coverage, your insurer would pay to replace the contents of your kitchen and rebuild the destroyed part of your home with materials of similar value.

The replacement value warranty covers the full cost of repairs, regardless of the amount. This coverage is usually available at an additional cost and can be beneficial in times of rapid inflation.

What does fire insurance cover?

Fire insurance is included in most home insurance policies. A standard HO-3 policy provides coverage for housing, personal property, liability, and loss of use.

  • Lodging: Home coverage is the part of a home insurance policy that covers the cost of repairing or rebuilding your home. Residential coverage also includes protection for built-in appliances and home systems.
  • Personal property: Personal property covers you if a fire damages your property. Be aware that items like specialty jewelry, fine art, and high-end electronics may require additional coverage.
  • Responsibility: If someone is injured in a fire in your home, your liability insurance will pay for legal or medical costs related to the incident.
  • Loss of use: If your home is uninhabitable due to fire, the insurance will pay additional expenses beyond your ordinary expenses if you move temporarily.

Although fire coverage is comprehensive, there are some exclusions.

What does fire insurance not cover?

Fire insurance does not cover arson if you intentionally cause a fire. It will also not cover fires caused by war, nuclear radiation or contamination.

If flood, earthquake or any other risk excluded in your policy causes a fire, you will need separate cover to recover the loss. Also, if you or your family members are injured in a fire, home insurance won’t cover your medical expenses, says Greenberg.

Damage caused by fire may be excluded from your coverage if you have a secondary residence, especially if it is usually unoccupied. A vacant or unoccupied home poses a higher risk of fire damage since no one is home to mitigate the threat when it occurs. You may need vacant home coverage and fire coverage to protect your vacant or unoccupied home from fire damage.

If you file a fire insurance claim, keep in mind that your insurance premiums may increase at renewal. According Assurance.com, premiums generally increase by 29% after the first claim. After the second claim, your premium is subject to an increase of up to 60%.

Do you need additional fire insurance?

If you have home insurance, you generally won’t need to purchase a separate policy for fire protection.

If you live in an area more susceptible to fire damage, hippopotamus insurance suggests you consider buying more coverage in these scenarios:

  • If you have an older home: If your home is damaged due to fire, building ordinance coverage will rebuild your home to meet new building codes.
  • If your home is undergoing major renovations: Consider extended replacement cost coverage if your home has custom or rare features. This coverage will replace your damaged items with items of similar value.
  • High value goods: If you have expensive jewelry or electronics, consider purchasing a special property float for additional personal property coverage.
  • Concerned about additional living expenses: Consider purchasing additional loss of use coverage if you are concerned about temporary living expenses if you have to move due to a fire.

Home fire coverage is a standalone fire insurance policy for additional coverage. You may need home fire coverage to supplement your primary insurance policy if you have secondary properties like a vacation home. Check with your insurance provider to see if they offer a fire insurance policy for your home.


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