Definition & Examples of Fire Insurance!


Fire insurance is a sort of property coverage that compensates you for any damages or losses caused by a fire. It pays for the cost of repairing or replacing damaged items in your house, as well as living expenses if you have to move out while your home is being repaired or replaced.

From 2014 to 2018, U.S. fire departments responded to around 353,100 residential fires, according to the National Fire Protection Association.

 Most homeowner's insurance packages include fire protection. There are, however, certain exclusions from coverage. It's critical to understand what yours entails and what your alternatives are for safeguarding your most valuable asset—your house.

Key Takeaways

Fire insurance is frequently included in homeowner's policies, although it may also be purchased separately if necessary.

It covers damages to your house, personal belongings, and other components of your property, as well as certain accommodation and food expenses while repairs are being made.

The coverage limits and deductibles will be the same as they are for the remainder of your insurance.

Arson, some acts of war, and homes that have been unoccupied for longer than 30 days are not covered by standard fire insurance.


What Is Fire Insurance?

Fire insurance is a sort of protection that is frequently included in homeowner's insurance policies. It pays for the costs of property damage caused by a fire. It also covers your personal goods as well as out-of-pocket expenditures for accommodation and food over and above your typical living expenses, subject to the limitations of your policy. The deductible and coverage limitations are the same as the remainder of your insurance.

Sheds, fences, and detached garages are common examples of covered buildings on your property. Some plans will also cover landscaping charges, such as tree and shrub damage.


NOTE: If you live in a rental house, your landlord's insurance will cover the costs of property damage caused by a fire. However, you are still responsible for your own belongings. To offset those losses, you'll need renters insurance.

How Fire Insurance Works


In the case of a fire on your property, you must make a claim with your insurance company. Take photographs of all damage to help you document your claim. A claims adjuster from the firm will come to your home to inspect the damage. When they come, double-check their identification since frauds can happen. Take them on a tour of your property so they can view everything.

When your insurance sends you an estimate, go over it carefully. Check it against the conditions of your insurance to be sure it's what you paid for.

What Does Fire Insurance Not Cover?


Your homeowner's insurance will cover fire damage to your house up to the policy limitations. However, most insurance do not cover damage caused by war, nuclear radiation, or other related risks.

It will not be covered if a homeowner deliberately sets fire to their house. Damage to an empty home is also not covered, at least not if the home had been vacant for more than 30 days before to the fire. If you wish to insure a house that isn't being used, you can get a "empty homeowners insurance policy."

Depending on where you reside, your coverage may also exclude or charge higher rates for additional occurrences. If you reside in a high-risk wildfire region, you may be subject to specific restrictions.

Extra fire insurance can be purchased in addition to your homeowner's policy to cover losses that your basic policy does not cover.


WARNING: If your car is destroyed or damaged as a result of a fire at your home, your homeowners insurance will not cover it. The comprehensive section of your auto coverage covers damage to your vehicle. If you simply have liability auto insurance, damage to your vehicle is not covered.


Replacement Cost vs. Actual Cash Value


Determine if your insurance pays actual cash value (ACV) or replacement cost for fire-damaged property. It's possible that ACV coverage won't be adequate to replace products at today's market value. However, you may be able to add a rider to your insurance that covers the cost of replacement. You will be able to replace your things with new ones of comparable quality, but your premium will be larger.

When it comes to reconstructing your property, the difference between actual cash worth and replacement cost is also important to consider. It's possible that the cost of rebuilding will be significantly more than the home's real financial value.

Fire Insurance for Business Owners


A simple company owner's coverage will generally cover fire damage to a business. Damage to your building, attached and detached buildings, office equipment, and merchandise are all included.

Most business owner's insurance will also cover additional operational costs if you have to relocate your company. Maintain an updated inventory of your company's equipment and other valuables. Important papers should also be stored off-site to avoid being destroyed in the event of a fire.

Do I Need Fire Insurance?

One of your most valuable assets is your home. Fire insurance, which is included in homeowner's insurance, can protect you from financial ruin.

Depending on where you reside, having fire insurance becomes even more vital. Wildfires have become more common in recent years in places like California. Since 1950, the area burnt by California wildfires has increased, with eight of the state's 20 biggest wildfires occurring since 2017. 

If you have a mortgage, your lender will require you to get homeowners insurance. Even if you own your house outright, it's a good idea to have it in place. Even if you own your house outright, insurance will safeguard your cash and valuables in the event of a calamity.

Unless you can afford to repair your house and replace your belongings out of pocket, homeowners insurance is required. Make sure it covers fire insurance so you're covered in the event of a disaster.