Fire Insurance: How to Protect Your Home

Fire insurance provides extra protection, on top of what your insurance policy would normally cover, in the event of losses or damages to your property.

Team LemonadeTeam Lemonade

Fire insurance offers extra protection beyond your existing home insurance coverage. It’s worth considering if:

  1. The value of your property exceeds the amount your insurance company will cover.
  2. Your home is at a high risk of fire damage, like an older home or one that’s in a wildfire-prone area.

What is fire insurance coverage?

Fire coverage pays for damages and losses you incur in the event of a fire. It covers the replacement cost of your personal belongings, as well as additional living expenses in case you have to temporarily move out of your home.

Is fire already covered by your property insurance?

Homeowners insurance covers your home and belongings against several types of hazards, also called “named perils.” Fire is one of the 16 named perils included in your standard homeowners insurance policy.

If a fire causes damages or losses to your place or stuff, your insurance company has your back, financially speaking, when it comes to replacements or fixes.

Fire and smoke damage (like ruined clothing) is part of your renters and homeowners insurance policies. The smoke does not necessarily have to be from a fire in your apartment; smoke damage from a neighbor’s fire would still be covered.

If a fire was at the root of any damages or losses to your place or stuff, your insurance company would have your back, financially speaking, when it comes to replacements or fixes.

In addition, the subsequent smoke damage from the fire (ruined clothing for example) is also listed in renters and homeowners insurance policies. The smoke does not necessarily even have to come from a fire in your apartment; smoke damage from a neighbor’s fire would still be covered.

Why purchase fire insurance?

If fire is already covered by your policy, you may wonder why you need the additional coverage offered by a fire insurance policy.

While your homeowners insurance policy offers some form of fire protection, policy limits may cap your coverage and make it insufficient. Just as you may want Extra Coverage to cover you beyond your personal property coverage, fire insurance covers losses and damages above your property coverage limit, or the maximum amount your insurance will pay.

Standalone fire insurance can be used to cover replacement and reconstruction costs in case your place burns down and everything is lost. These unfortunate situations aren’t typically fully covered under your standard insurance policy. Some home insurance policies can exclude homes at a high risk of fire. If you’re a property owner in a wildfire-prone area, fire insurance can offer you reassurance and protection that goes beyond your standard property insurance policy.

What fire insurance covers

If there was a short circuit in your apartment that caused a fire, you’re covered. If the source of the fire isn’t covered by insurance (i.e. a flood somehow caused a fire to break out destroying your things), you’d also be covered.

A fire insurance policy covers smoke or water damage to your place and your stuff, sometimes for even up to a year. This isn’t covered by standard renters or homeowners insurance coverage.

In addition, fire protection will cover you for loss of use if a fire makes your place uninhabitable. For example, if fire damage forces you out of your home, anything above your normal daily expenses will be covered (like laundry service, meals out, and hotel costs). Just be sure to keep all your receipts so your insurance company can reimburse you when you file a claim!

What fire insurance doesn’t cover

There are some exclusions when it comes to fire insurance. For example, your insurance provider won’t cover an insurance claim if you or someone else on your policy intentionally caused the fire – that’s called arson, and it’s not covered by insurance.

If the fire was caused by negligence (reckless or unreasonable action), it may not be covered.

Fire insurance doesn’t cover fires caused by war, contamination, or nuclear radiation.

If you’re insuring a vacant home that was empty for more than 30 days before the start of the fire, fire insurance may not cover it.

How fire insurance works

Hopefully, you never experience a house fire, but if you do, here are the steps to take:

  • Contact your insurance agent to file a claim. They’ll send over an adjuster to assess the damage.
  • Be sure to take photos of the damage.
  • Keep detailed records of the items that were damaged or lost in the fire, along with their monetary value if possible.
  • Try to determine the cause of the fire, as well as where and when it started.

Replacement cost value vs. actual cost value

When purchasing a policy, you’ll be asked to choose between replacement cost and actual cash value coverage types. While both options will help you replace damaged items and rebuild your home, there are important differences between the two.

Actual cash value (ACV) coverage factors in depreciation and wear and tear on your belongings. You’ll receive a payout worth the item’s current estimated value.

Replacement cost value (RCV) coverage reimburses you based on how much it would cost to repair, replace, or rebuild your property and belongings based on current prices. RCV policies have a higher premium, but for some policyholders, it may be worth it.

In both cases, policyholders have to pay a deductible before the coverage kicks in.

The bottom line

Your home is usually your biggest asset. Insuring it protects you financially in case something happens.

Most homeowners insurance policies cover damage to your home and belongings. Some property owners choose to purchase separate fire insurance in case of high risk or for additional reassurance.

Whether or not you choose to get additional fire insurance, be sure you have homeowners or renters insurance, which will cover most of your needs in case of a fire.

Get an insurance quote from Lemonade in just 90 seconds.

Please note: Lemonade articles and other editorial content are meant for educational purposes only, and should not be relied upon instead of professional legal, insurance or financial advice. The content of these educational articles does not alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade, which differ according to your state of residence. While we regularly review previously published content to ensure it is accurate and up-to-date, there may be instances in which legal conditions or policy details have changed since publication. Any hypothetical examples used in Lemonade editorial content are purely expositional. Hypothetical examples do not alter or bind Lemonade to any application of your insurance policy to the particular facts and circumstances of any actual claim.