Homeowners Insurance and Fires: What to Know
Homeowners insurance covers fire and smoke damage, including repairs and temporary housing—here’s what you need to know to protect your home.
Fire damage and your insurance policy
House fires can start in many ways—unattended candles, cooking mishaps, electrical issues, or even a lightning strike. No matter the cause, the aftermath can be overwhelming. In addition to fire and smoke damage, you may need temporary housing while repairs are made. Fortunately, most homeowners insurance policies cover structural damage, personal belongings, and living expenses if your home is uninhabitable. To ensure a smooth claims process, document the damage with photos, keep receipts for expenses, and contact your insurer as soon as possible.
Understanding what your homeowners insurance covers—and what steps to take after a fire—can make the recovery process smoother. Let’s break down how fire and smoke damage coverage works and what you need to know when filing a claim.
How likely am I to suffer a loss from fire damage?Â
Believe it or not, house fires are incredibly common and many are caused accidentally by occupants. Be it an unwatched candle, electrical surge or cooking mishap, the majority of house fires begin because of human error. Remember that your insurance policy will pay only up to its limitations, but standard homeowners policies are typically sufficient in covering losses from fire damage.Â
Does my homeowners insurance cover fire damage?
Yes, all homeowners policies cover damage by fire. Fire is one of the “basic named perils'' (alongside internal explosion and lightning) covered by every form of homeowners coverage. The word peril, in insurance terms, refers to the cause of a loss. There are several forms of homeowners insurance, each with a different list of perils the insurance company will cover. No need to worry: because fire is one of the perils listed at the most basic level, any homeowners policy form will cover damage resulting from a fire.Â
The parts of a homeowners policy
Homeowners policies cover more than just your building. There are six parts to a homeowners policy, and each part represents a covered element. Let's examine how these policy parts affect a claim after fire damage to your home.Â
- Coverage A: Dwelling. This refers to the home itself and any attached structures.
- Coverage B: Other Structures. Do you have a detached garage, shed or carport? These would fall under other structures coverage.
- Coverage C: Personal Property. No need to worry about this, either. This part covers repair or replacement of personal belongings damaged by a covered peril, either at their actual cash value or on a replacement cost basis.Â
- Coverage D: Additional Living Expenses. Think: loss of use coverage. Was the fire damage so severe that it rendered the home uninhabitable for some time? This clause helps cover the additional costs of temporary relocation while your home is being repaired.Â
- Coverage E: Personal Liability. Say the fire spread across the property line and your neighbor’s fence went up in flames. This section protects against lawsuits and related damages if the damages extended to the property of someone else.Â
- Coverage F: Medical Payments. Did a guest’s injury from the fire result in a hospital run? This coverage pays for medical costs for those not listed as residents of the household, the injuries were sustained on your property.
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The best way to save is to shop around!
What types of fires will my homeowners policy cover?
The most important thing to remember about insurance coverage is that the cause of loss must be accidental. Insurance will not cover a loss if the cause was intentional.Â
Some examples of types of fires your insurance will cover:Â
- Chimney fires
- Accidental house fires
- Electrical fires
- Earthquake fire damage
- Fire started by someone else
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If a fire starts in your residence and spreads to your vehicle, then most likely, it’s your homeowners or renters policy that will cover the damage to the vehicle. Any fire that starts in your garage however, is more likely covered by your car insurance. Wonky, we know!
How much does a homeowners insurance claim for fire damage cost?
Since standard homeowners policies cover fire and smoke, your insurance company will cover damages resulting from these perils up to the policy limits. The coverage limits you selected at the inception of your policy are listed in your policy documents. You are responsible for the deductible, the amount of which can also be found in your policy documents. Essentially, your home insurance policy will cover the cost of the damages up to the limits, minus the deductible that the insured pays out of pocket. If the damages exceed the limits of your policy and you do not have excess or other coverage, you will also be responsible for covering the excess.
AVERAGE HOME INSURANCE PREMIUM INCREASES AFTER FIRE CLAIM
The table below shows the differences in homeowners insurance premiums before and after fire claims.Â
| Number of Claims | Average Annual Premium | Monthly Cost | % Difference |
|---|---|---|---|
| No Claims | $1,255 | $104 | - |
| 1 Fire Claim | $1,525 | $127 | 21% |
| 2 Fire Claims | $1,590 | $132 | 4% |
| 3 Fire Claims | $1,635 | $136 | 3% |
HOME INSURANCE PREMIUMS BY COMPANY AFTER FIRE CLAIM
Sorted by some major insurance companies, the following table shows the average annual homeowners insurance rates after a fire damage claim:Â
| Insurance Company | Rate After Fire Claim |
|---|---|
| Allstate | $1,974 |
| American Family | $1,724 |
| Farmers | $2,121 |
| Liberty Mutual | $2,012 |
| Nationwide | $1,745 |
| State Farm | $1,313 |
| Travelers | $2,078 |
| USAA | $1,614 |
You can also check out our guide to the best home insurance companies based on the results of The Zebra's Customer Satisfaction Survey, third-party reviews, and other factors.
Does homeowners insurance cover smoke damage?
Where there’s fire, there’s smoke. Smoke can damage property, even if the damaged items didn’t erupt in flames. Smoke can mar walls, ruin furniture, break glass, and compromise electronic devices. If the smoke came from the fire and damaged your belongings, they, too, can be covered under your home insurance.Â
What if I own a high-risk home?
Some areas are more prone to wildfires, forest fires or brush fires than others, and some older homes might have outdated electrical wiring that insurance companies see as dangerous. While standard homeowners insurance policies typically prove sufficient coverage for most homes, if your home is located in a particularly fire-prone area, it may prove challenging to find a homeowners policy or you may wish to consider extra fire insurance coverage.Â
This is where the FAIR Plan comes in. The Fair Access to Insurance Requirements (FAIR) Plan is a state-mandated program that helps cover high-risk properties when standard insurance isn’t available. It is important to note that FAIR plans are particularly bare-bones when it comes to coverage, covering only a few perils rather than the long list that homeowners policies cover. For example, California’s FAIR plan only covers fire, internal explosion and lightning before endorsements, so in this case, it would be in the homeowner’s best interest to still search for a standard homeowners policy to cover other perils like theft and hail damage.[1]
While the FAIR plan is government-mandated, you must meet certain conditions to qualify for coverage. Owning a high-risk home does not automatically qualify you for a policy. You may be asked to limit the fire risk by making repairs or adjustments to your home. The FAIR plan is generally no cheaper than a homeowners policy from a private insurer, though, so exploring this option is unnecessary unless your home is considered high-risk or you have been denied coverage by private insurers.Â
Most homeowners and dwelling coverages offer sufficient protection in the event your property is damaged from fire. Your home, structures on the property and personal belongings are covered, as well as additional living expenses if you are required to relocate until repairs are completed. Unless your home is located in a high-risk area or the house is very old, your standard homeowners policy is likely all you need to cover fire damage.Â
Homeowners insurance and fire damage: FAQs
How to Apply. CA FAIR Plan
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