- Home/Property Insurance

Fire Insurance

Typical homeowners’ and tenants’ insurance policies cover damage due to fire and lightning. Homeowners’ policies include both complete destruction and partial damage of building and contents by flames and smoke, while tenants’ policies cover contents only. Generally homeowners’ policies will also cover damage to unattached structures, such as garages and sheds, as well as damage to trees, other plants and lawns on the property.

For fire insurance claims the insurance company will usually require a police report, as well as information on: the date and type of loss or damage, the condition of the building, descriptions and documentation of the damaged contents and whether temporary repairs are needed. Some policies include loss of use coverage and pay the cost of temporary accommodation and reimbursement of some other expenses until your home is rebuilt or you can find alternative rental accommodation.

Coverage for rebuilding versus moving varies between insurance companies. Some policies pay the cost to rebuild in your current location, and some companies offer “extended limits’ which allow you to rebuild in the same style and quality as your destroyed home, even if this exceeds your stated policy limits. If you do not choose to rebuild, or you decide to rebuild on a different site, some policies will only reimburse you the replacement cost minus depreciation (based on the age and condition of the building, including the roof, flooring and furnace). Other policies will pay you the amount it would cost you to rebuild on your current site and leave you to decide whether and where to rebuild, relocate or rent. Some policies stipulate that you must rebuild within two years.

Documenting your losses is critical and the more proof you can provide the better. You will need to make a written list of everything that was damaged, room by room, including the manufacturer, brand name, date and place of purchase. Photographs, receipts, owner’s manuals, warranty cards, appraisals and original packaging are all helpful in establishing your claim. Some people make videos, take photographs of their home and make annual inventories of their possessions and store these records offsite. If all documentation has been lost in the fire, you may need to get notarized statements from friends and relatives describing the items they saw in your home and get the help of credit card companies and retailers to help you provide proof of your purchases. Do not throw away badly damaged items until an adjuster has seen them.

Be aware that different insurance policies will reimburse different types of items in varying ways. “Extended replacement coverage” will pay for items according to what they cost today, although some items may still be subject to depreciation. “Actual cash value” will cover you for the cost of replacement minus depreciation.

Compare the fire insurance coverage offered by different insurance companies as the rates, amount of coverage for different types of structures and possessions, exclusions and limitations will vary.