Many household dangers can cause your home to be destroyed, including the potential for fires. The fire can cause significant damage to a home – and, if the origin is a wildfire, it is largely beyond your control. The most recent stories indicate that wildfires caused an additional $14.1 billion in damage to properties in the U.S. in 2021, according to the National Fire Protection Association. In order to avoid the financial burden of fire, it’s crucial to understand your home insurance policy and what it covers. Here is what you should understand.
Does homeowners insurance include coverage for fires?
Typically, home insurance involves coverage for the effects of fire and smoke.
House fires are initiated by a variety of causes inside the home, including a candle or other appliance that catches fire. It can also begin from a external source like a wildfire or lightning strike. Typically, these types of fires will be covered by your homeowner’s insurance, up to the maximum policy limit for repairs.
What is typically covered in a home policy regarding fires?
Homeowners insurance typically covers the most common types of fires, including electrical wires, cooking, lighting, your fireplace, heaters or another household component. Incidental fires or accidents that are caused by user error or misconception will also be covered by your insurance policy.
The damage caused by fires that are covered by home insurance.
Your home may or may not have been shielded from wildfires. Many home insurance policies will pay for damages caused by wildfires.
However, if you’re located in a region that is prone to wildfires, your insurance company may increase the cost of your premium or deny your insurance entirely if you’re located in a wildfire-prone region or state. Some states, like California, also have initiatives that allow you to purchase coverage through them if you can’t get it elsewhere.
The most effective way to determine if you are protected against wildfire damage is to contact your insurance company and ask them about the specifics of your policy.
The cost of fire damage that is not covered by a home insurance policy.
Homeowners insurance does not cover arson or fire that is intended or purposely caused. If someone attempted to destroy their own home in order to receive insurance money, if they were discovered by the insurance company, that person would be charged with insurance fraud and would face additional punishment for this crime.
Additionally, it’s vital to know that the practice of using knobs and tubes to control light isn’t always covered. When discussing homeowner insurance, the company or licensed insurance agent will inquire about the home’s electrical system.
If you have concerns about what your policy covers, talk to your insurance company about it.
Does it make sense for homeowners to have separate insurance for fireworks?
No, homeowners typically do not require a separate policy regarding fires. However, it may be more difficult or expensive to have coverage in a wildfire-prone area or state.
Almost all standard homeowner’s insurance policies include already types of coverage that typically pay for fires, so you would not have to purchase a separate policy for the cost of fire insurance. The types of coverage that would pay for damages caused by a fire include:
- Home insurance: Home insurance would probably pay to reconstruct your home if a fire would total or destroy the majority of it.
- Personal property insurance: This insurance typically pays to mend or replace items that are damaged, such as electronics and furniture.
- Liability insurance: This insurance would pay out if the fire caused damage to a part of your neighbor’s property.
- The loss of use insurance: If the fire causes you to lose your home, this insurance may be utilized to assist you in temporarily moving to a new location. It may incur the expense of accommodating themselves in a hotel, food, cleaning, and other associated living costs.
- Other structures: Many detached structures on your property may be protected by this type of coverage.
What is the monetary value of home insurance in the event of a fire?
The typical compensation amount for lightning and fire damage is $83,519, according to the Insurance Information Institute (Triple-I). How much insurance you have depends on the amount you cover. Your policy will describe the maximum coverage that you have, and it may be beneficial to discuss these limits with a insurance professional.
If your home were destroyed by fire and you had $250,000 in insurance coverage, your insurance would pay for up to $250,000 of the costs of rebuilding, minus your deductible. If you have insufficient insurance and the rebuild will cost $350,000, you would have to pay $100,000 cash on the spot for the difference, unless you have a coverage option like guaranteed or extended replacement cost that increases your coverage limit.
