Does Homeowners Insurance Cover Fire?

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Is fire damage covered under standard homeowners insurance policies?
When and how does homeowners insurance cover fires?
How much do I have to pay if homeowners insurance does cover fire damage?
If homeowners insurance doesn’t cover fire damage, what will?
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Is fire damage covered under standard homeowners insurance policies?

As a new homeowner, I’m curious about what all is covered under my insurance. I’m worried specifically about damage or total destruction due to fires of any kind, since I know fire damage is one of the greatest risks to homeowners. Is fire damage covered under standard homeowners insurance policies?

Absolutely. In fact, all property insurance is based on the fire peril. If your home burns down completely, your insurance company will write you a check for the insured value of the dwelling. About 50%-70% of the premium you pay is actually for the risk of fire to your home. There aren’t many coverage exclusions, either. However, standard homeowners policies don’t protect what’s known as “friendly fire,” which we’ll discuss more in a bit.

Fire is one of the biggest risks to homeowners because it moves so quickly and can easily burn an entire home in not much time at all. Homeowners insurance companies know this, and they’re there to protect you. Fires are also one of the costliest claims to insure, which explains why their risk accounts for such a high percentage of your overall premium.

When and how does homeowners insurance cover fires?

A standard homeowners insurance policy provides coverage for fires in several ways. Homeowners insurance will protect not only the dwelling or the actual structure of the home itself, but also your personal property in the event of a fire. We’ll take a more in-depth look at how homeowners insurance protects you against fires.

Homeowners insurance provides coverage for fires in the following ways:

  • Home repair or rebuilding: Your homeowners insurance policy covers the costs to repair or rebuild areas of your home damaged by fire. The insurance company will also pay out the value of your policy if your home completely burns to the ground.
  • Property damage or destruction: If your insured personal property in and around the home is damaged or destroyed due to fire, your homeowners insurance policy will cover you.
  • Temporary lodging: If your home is damaged badly enough by fire to cause you to need temporary lodging while waiting for repairs to be completed, your insurance policy will cover the fees for your hotel, etc.
  • Other aspects of fire damage: Homeowners insurance provides coverage for damage due to the actual fire itself, as well as the smoke from the fire, or water damage caused while attempting to extinguish the fire.
  • Fires of a “hostile” nature: In order to be covered under a homeowners policy, the peril must be what’s considered a “hostile fire” by insurance companies. Hostile fires are defined as fires that become much hotter than intended, or that become uncontrolled. A fire you intentionally start is considered to become hostile if it spreads beyond the intended boundaries or cannot be extinguished. An intentional brush fire that gets out of hand would be an example of a hostile fire.
  • Wildfires: Standard homeowners policies provide coverage for damage or destruction caused by wildfires, as well.

All of this considered, homeowners insurance policies do not provide coverage for “friendly fires.” These fires are intentionally started by you and remain within their intended parameters, such as in a fireplace. Homeowners insurance will not cover property damage or destruction caused by this type of fire.

How much do I have to pay if homeowners insurance covers fire damage?

After paying your deductible, you’ll be responsible for paying any amount exceeding your policy’s limit for the dwelling itself and/or for the property damage category, depending on what the fire damages or destroys. As far as personal property is concerned, a standard homeowners policy has a deductible that’s typically 1% of the home’s value, so if your home is worth $300,000, you might have to exceed $3,000 in damaged personal property before your insurance starts paying.

You can work with your independent insurance agent to hunt for a homeowners insurance policy with a lower deductible, if you choose. You may also opt to increase your homeowners coverage limits for the dwelling itself or for your personal property, or both. Keep the value of your belongings in mind when reviewing your personal policy to determine whether you need more coverage.

If homeowners insurance doesn’t cover fire damage, what will?

Your homeowners policy has coverage built in for fire damage or destruction. Your home itself, as well as your personal property, are both covered in the event of fire. The only thing to consider is if your personal policy provides enough coverage in both of these areas. Also consider if your home is at an increased risk of fire damage, due to the area you live in or your personal activities. If you’re someone who frequently starts fires, you may want extra coverage.

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