Q

Does homeowners insurance cover fire?

A

Yes, homeowners insurance covers your home and personal belongings if they’re damaged by smoke or fire. But fires can result in a devastating loss and you may need to add supplemental coverage or raise your existing coverage limits to be fully protected.

Stephanie Nieves author photo

By

Stephanie Nieves

Stephanie Nieves

Property and Casualty Insurance Expert

Stephanie Nieves is an insurance editor at Policygenius in New York City, specializing in home and auto insurance. Her work has appeared in Business Insider, PayScale, Fairygodboss, and The Muse.

Updated January 25, 2021|6 min read

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A homeowners insurance policy covers you financially in case of damage or loss due to perils like wind, falling objects, and, yes, fire. A standard homeowners insurance policy is made up of six basic protections that pay to repair or replace your home and personal belongings or cover your liability when the unexpected happens. If a fire were to suddenly break out in your home, a standard policy would reimburse you for the cost of the damage, up to your coverage limits.

Though fire damage is typically covered by homeowners insurance, a fire can profoundly devastate your property and a basic homeowners insurance policy may not be enough to fully cover the damage, especially if you own items whose value exceeds any coverage sublimits. If you live in a fire-prone area, you may want to look into additional coverage or raise your payout limits for an additional premium to sufficiently protect your home.

Key Takeaways

  • Homeowners insurance will cover any fires that are sudden and accidental, including electrical fires, forest fires, fires caused by lightning, and wildfires

  • Your homeowners insurance will pay to repair damage to the structure of your home as well as damage to your possessions

  • Fires caused intentionally, or by negligence or deterioration over time would not be covered

  • If you’re concerned about having enough protection, you can look into additional coverage to raise your payout limits for your home and certain valuables

What does homeowners insurance cover in a fire?

Fire is covered by default in a standard homeowners insurance policy; in general, any fire damage that is sudden and accidental would be covered. Smoke damage from a fire would also be covered. Your homeowners policy is made up of different types of coverage that all work together to cover you in case of a disaster, so if your house burns down in a fire, here’s what would be covered by your homeowners insurance:

  • Your home’s structure - If a fire damages the structure of your home itself, the cost to repair or rebuild the damage would be covered by your dwelling coverage

  • Your belongings - If a house fire damages any of your personal property, including furniture, clothing, televisions and computers, the personal property coverage in your policy would pay to repair or replace the damaged items, either at their actual cash value or at their replacement cost

  • Other structures on your property - If a fire damages any structures on your property that aren’t attached to your home, like your fence, shed, detached garage or mailbox, they would be covered by the other structures component of your policy. That coverage would also include gazebos, detached patios, and construction materials and supplies related to your detached property

  • Your hotel stay - If fire or smoke damage makes your home unlivable and you need to relocate while it undergoes repairs, loss-of-use coverage will reimburse you for temporary living expenses at a hotel or a rental unit. Loss-of-use coverage can also cover groceries, fuel expenses, and other extra costs you incur while your home is being rebuilt

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Many fires result in a total loss, and your home may need to be fully rebuilt afterwards. Extra costs can come up during a rebuild, like if your home needs to be rebuilt up to new building codes, so the cost to replace your home after a fire may actually exceed your coverage limit.

For extra coverage, you can look into policy add-ons like an extended replacement cost endorsement which will typically extend your dwelling coverage limit by 25–50%, or guaranteed replacement cost coverage, which will cover the cost to rebuild your home no matter how much it exceeds your limits.

To insure any expensive items up to their full value, you can add a scheduled personal property endorsement to your policy to raise your coverage limits on specific items that are subject to lower sublimits in your policy, like a pricey desktop computer or a valuable painting.

How much does insurance pay for house fire?

If your home, personal possessions, or other structures on your property are damaged in a fire, your home insurer will reimburse you up to the coverage limits spelled out in your policy.

Your dwelling coverage limit is typically set at your home’s replacement cost, or the cost to fully rebuild your home (minus depreciation), so if your home would cost $350,000 to rebuild from scratch, your insurance would cover you up to that amount. Some endorsements, like extended replacement cost or guaranteed replacement cost, will increase the amount you’ll be paid-out if your home costs more to rebuild than your original limits.

Your personal property coverage limits are typically set at 50% of your dwelling coverage limit, so using the same example, homeowners insurance would cover $175,000 worth of damage to your personal belongings.

That means that if you have a living room fire and your couch, rug, table and books all need to be replaced, your home insurance will cover the cost in full. However some categories of items, like electronics and artwork, have lower sublimits, so if you have an expensive painting above your fireplace, you should make sure to add extra coverage for that item specifically.

Other structures on your property would be covered up to 10% of your home’s dwelling coverage limit (in this case, $35,000) and temporary housing through loss-of-use coverage would be covered up to 20% of your dwelling coverage limit (or $70,000, but some insurers may require you to pay a deductible upfront before they will cover the rest).

What types of fire damage will homeowners insurance cover?

Fire and smoke damage are typically covered by homeowners insurance, but the cause of the fire may determine whether or not your insurer will actually cover you. A standard policy will cover fires provided they are sudden or accidental, including fires caused by lightning strikes, accidents like knocked-over candles, and electrical fires. But if a fire is caused by an excluded peril, any additional damage beyond the fire might not be covered.

1. Chimney fires

Chimney fires, a hazard of using your fireplace or wood stove, are typically covered by homeowners insurance. However your insurer may not cover fire damage if it’s determined to be a result of negligence or regular wear and tear, so you should keep your chimney clean and clear of soot.

2. Accidental fires

If your curtain catches fire due to a lit candle, your homeowners insurance will pay to repair or replace your home and personal belongings. But homeowners insurance won’t cover arson, meaning intentional fire damage, so if you set your own property on fire you won't be reimbursed.

3. Electrical fires

Yes, homeowners insurance covers fire damage caused by artificially generated electrical currents and poor maintenance jobs. An electrical fault that suddenly starts a fire in a ceiling fan or wall outlet would be covered, but a fire that’s caused by worn insulation, outdated aluminum wiring and poor maintenance over years of use might not be.

4. Earthquake fire damage

A standard homeowners insurance policy will typically cover fire damage if the fire was caused by an earthquake, even though the earthquake itself would not be a covered peril. That means that any other earthquake damage, like cracks in your home’s foundation, would not be covered unless you purchased additional earthquake insurance.

5. Forest fires

Yes, if a forest fire burns through your home, and damages your property and personal belongings, homeowners insurance will typically cover the cost of the damage.

6. Wildfires

If a wildfire, bushfire, or grass fire blazes through your home and personal property, homeowners insurance would also cover the damage, like it would with any other fire. However, if you live in a wildfire-prone region, like certain parts of California, you may have trouble getting a standard policy. In this case, you may need to find coverage through a non-standard insurance company, like a surplus or excess lines carrier.

When won’t homeowners insurance cover a fire?

Homeowners insurance covers most causes of fire damage, but it won’t cover all fires. For starters, it won’t cover a fire that is intentionally set, so you can’t burn down your shed on purpose and then expect to be reimbursed.

Fire damage caused by arson or vandalism perpetrated by someone else, however, would be covered as those are both considered covered perils. A standard policy will also not cover fire damage if its initial cause was war, nuclear hazards, poor maintenance, or regular wear and tear.

Do I need separate fire insurance?

Although standalone fire insurance is available for purchase as a separate insurance product, you probably don’t need fire insurance for your primary home if it is already covered by standard homeowners insurance, since home insurance covers fire by default. Standalone fire coverage is usually more limited than the fire coverage already in a policy, but it could be worth buying if you live in a fire prone area, like certain parts of Texas, and fire is specicially excluded in your homeowners insurance policy.

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