What Does Fire Insurance Cover?

What does fire insurance cover? Don't wait until you've had a fire to figure out what your homeowner's fire insurance policy covers. Read your policy carefully to determine whether or not you need to purchase additional coverage.

Traditional homeowner's insurance covers fire.
A traditional homeowner's insurance policy typically covers fire. In the event of a fire, your structure and possibly personal property is covered either at cash value or replacement value. Replacement value is a better option, as it pays whatever it costs to replace the structure or items you lose, whereas cash or market value may only pay you what the item is worth minus depreciation; not necessarily what it would cost to replace it.

Examine your homeowner's insurance policy to determine the extent of the fire coverage and how the insurer handles fire damage. Most policies cover fire that originates both internally and externally. If you're dissatisfied with your fire coverage, you can purchase additional homeowner's fire insurance.

What fire insurance doesn't cover.
Fire insurance never covers negligence. If you leave your fireplace burning unattended, the insurer may not cover the damage. For example, if you decide to have a fire pit in your living room, the insurance definitely won't cover it. Also think twice when you've got open flames anywhere near your home, and never leave open flames unattended. Candles, cigarettes, fireplaces and kitchen accidents account for thousands of home fires every year-fires that could be avoided with a little care and by observing typical safety precautions.

When to consider additional homeowner's fire insurance.
Your normal homeowner's insurance policy is sufficient in most circumstances. However, if you live in an area prone to wildfires and want additional coverage, you might want to look into additional homeowner's fire insurance to make sure your home and your belongings are fully covered. Make sure your policy limits are high enough to cover all of your belongings, and look into additional riders for personal property or medical expenses if your policy doesn't already include such coverage.

Temporary housing and clean-up assistance.
Some additional features that your homeowner's fire insurance may cover are temporary housing and clean-up assistance. Even in the event of a fairly small fire, your home may be temporarily uninhabitable due to structural concerns or smoke inhalation risks. Some policies cover the cost of temporary housing while your home is repaired or cleaned.

Additionally, some policies cover clean-up assistance. This may include restoration services or other options to remove damage and traces of the fire and get it ready for habitation again. Clean-up assistance isn't a given, so check your policy for specifics if you really want this feature.