Erik J. Martin is a Chicago area-based insurance writer whose articles have been featured in AARP The Magazine, The Chicago Tribune, Reader's Digest, USAA Magazine and other publications.
Erik Martin Insurance WriterErik J. Martin is a Chicago area-based insurance writer whose articles have been featured in AARP The Magazine, The Chicago Tribune, Reader's Digest, USAA Magazine and other publications.
Written By Erik Martin Insurance WriterErik J. Martin is a Chicago area-based insurance writer whose articles have been featured in AARP The Magazine, The Chicago Tribune, Reader's Digest, USAA Magazine and other publications.
Erik Martin Insurance WriterErik J. Martin is a Chicago area-based insurance writer whose articles have been featured in AARP The Magazine, The Chicago Tribune, Reader's Digest, USAA Magazine and other publications.
Insurance Writer Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
Les Masterson Deputy Editor, InsuranceLes Masterson is a deputy editor and insurance analyst at Forbes Advisor. He has been a journalist, reporter, editor and content creator for more than 25 years. He has covered insurance for a decade, including auto, home, life and health. Before cove.
| Deputy Editor, Insurance
Updated: Oct 5, 2023, 4:55am
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Getty
Having the proper fire insurance through a homeowners insurance policy is crucial to avoid potentially ruinous financial losses from a fire. Fortunately, the best home insurance companies have you covered.
Coverage within a standard home insurance policy can compensate you after a fire, including dwelling, other structures, personal property, loss of use, and even liability coverage.
Fire insurance is part of homeowners insurance and covers the cost of damages and losses caused by a fire. The coverage can pay to repair or rebuild your house and replace damaged personal property such as clothing, furniture, and appliances.
Home insurance also includes loss of use coverage, which pays for your extra costs if your home is inhabitable after a fire and you have to live elsewhere during repairs. Loss of use costs can include lodging and restaurant meals.
A home insurance policy also provides personal liability coverage that covers you if someone (who is not in your household) is hurt or, in some cases, if another property is damaged because of a fire that started in your home.
If you’re concerned about having enough dwelling coverage, you may be able to buy extended or guaranteed replacement cost coverage, which adds an extra amount to your dwelling limits if needed.
If your property is damaged by a fire, you can file a claim with your home insurance company. The insurer will review the damage and your policy to identify what’s covered and how much you’re owed, minus the deductible.
The company will pay up to your dwelling coverage limit for damage to your house structure. You may also be able to buy extended or guaranteed replacement cost coverage at an added cost. Extended replacement cost expands your dwelling coverage by a percentage, such as 25%, if the cost to rebuild your home exceeds the base dwelling insurance limits. That means if you have $300,000 in dwelling coverage, extended replacement cost coverage at 25% extra will reimburse you up to $375,000. Guaranteed replacement cost goes even further and pays whatever it costs to rebuild your house.
Extended or guaranteed replacement cost coverage can play a key role in getting enough insurance reimbursement to rebuild your house, especially during times of higher inflation or a widespread disaster that creates increased demand for construction. In these cases you may find that your dwelling coverage isn’t sufficient and you need to tap your extended or guaranteed replacement cost coverage.
The exact amount you’ll get for damaged personal property hinges on whether you have replacement cost or actual cash value coverage. Actual cash value coverage reimburses you for personal property minus depreciation, while replacement cost coverage pays to replace the damaged property with new, similar items.
A homeowners policy covers accidental causes of fire, including:
Home insurance won’t cover all causes of fires, including negligence and fires set by the homeowner (arson).
Preventable fires may not be covered by your policy. For instance, If a fire starts because you didn’t properly clean and maintain your chimney, the insurance company might not pay for the damage.
If you reside in an area susceptible to wildfires, you might find it challenging to get a homeowners insurance policy that covers wildfire damage.
Fire protection within a home insurance policy is found in several coverage types.
Dwelling coverage pays for the cost of rebuilding or repairing your home’s structure as well as attached structures, such as a garage. It will pay up to your dwelling coverage limit unless you have expanded coverage like extended replacement cost coverage.
Other structures coverage pays for damage to detached structures such as sheds, fences, decks, canopies, pergolas, gazebos and detached garages.
Personal property coverage pays for damage to your belongings, such as furniture, electronics, appliances and clothing. You can typically choose between actual cash value and replacement cost coverage, which is more expensive but provides a higher amount of reimbursement if you file a personal property damage claim.
Loss of use coverage can pay for your extra costs if you must vacate your home while it’s being rebuilt or fixed after a fire. That may include a temporary hotel stay. This is also sometimes called additional living expenses coverage.
Liability insurance covers you for injury to another person or damage to their property for which you’re legally liable. For example, a fire at your home spreads to a neighbor’s house. You’re found liable because of negligence, such as an unattended candle sparking a blaze, and they sue you for damages. Personal liability coverage will cover the expenses involved in a lawsuit, including settlements and defense costs.
The average homeowners insurance policy costs $1,582 a year for a policy with $350,000 of dwelling insurance, according to Forbes Advisor‘s analysis. You don’t have to buy separate fire insurance, as it’s included as part of a home insurance policy.
