Understanding The Ins And Outs Of Fire Damage Insurance
A standard homeowner’s insurance policy will cover fire damage that has affected your property, yet there is usually a limit to what that coverage entails and stipulations as to what is covered depending on the cause of the fire.
If you live in an area where fires are a common occurrence, it would be smart to purchase a separate fire insurance plan. This is completely different policy from your standard homeowner’s insurance that specifically focuses on covering any damage to your home that stems directly from a fire.
This specialized policy will offer a higher level of coverage that is greater than what is offered in your standard policy. As well as covering all fire damages, this separate policy also covers smoke and water damage that was caused to the home as a result of a fire.
Not only will all fire-related damages done to the property be covered, but the policy usually includes the replacement or repair of any nearby structures, such as a detached garage, gazebo or guest house.
Homeowners may also consider purchasing fire damage insurance if they own exceptionally valuable items that are kept inside the home that may exceed the amount of money that a normal standard homeowner’s insurance policy may cover. It is also wise to consider the fact that along with covering any damaged personal property, fire insurance usually covers the cost of living outside of the home while it is undergoing repairs.
Know What Coverage Is Included In Your Fire Damage Policy
When you purchase fire damage insurance, you should expect to be receive coverage for electrical fires, gas explosion, pipe bursts, water tank explosions, lightning and other natural disasters.
It is standard for fire insurance to cover fires that originated from either in or outside the home, however the amount of coverage does depend on how the fire was started.
If the entire property is damaged beyond repair, then the policy will reimburse on a “replacement-cost” basis. Policyholders with homes that are considered “totaled” will be reimbursed by the insurance company based on the current market value of the home.
If there are repairable damages done to the property, then it will pay out cash based on the value of those damages. The insurance company will go through a list of your lost possessions and reimburse based on the market value for those items.
Keep Your Insurance Policy Up-To-Date
Most fire insurance policies are set up to last for one year, making it possible for the homeowner to renew annually. If you chose to renew, then it is important to take stock of the items in your home that you wish to have covered, as well as documenting the condition of the property itself.
Make sure to check the current property value of the home and update that amount in your policy. By reevaluating the cost of your property and your possessions, you will ensure that all the most important items are fully covered in the event that you do experience a fire during the year.
However, it is important to note that if you have any luxury items such as artwork or expensive jewelry, you may want to purchase additional insurance specifically for those items, since fire insurance does set a cap for those types of goods.
In the end, it is better to be safe than sorry. You never know when a fire may occur, so keep yourself and your home protected by buying fire insurance today.