8 Tips for Understanding Your Fire Insurance Policy

With more than 350,000 home affected by fires each year, it's important to understand your insurance coverage. Fortunately, most homeowner's policies cover fires, whether they are wildfires or house fires. The following information will help you understand how your insurance can protect your home and belongings in the event of a fire:

  • Check your insurance coverage. Homeowner's insurance policies generally cover both house fires and wildfires. If a fire destroys your home, your policy should cover the cost of rebuilding. Even if just part of your home is damaged - your roof, for example - your insurance should cover the cost to replace it.
  • Understand your policy's requirements. Insurers base their premiums on certain things, for example, the location of the fire department, the location of the nearest fire hydrant, or that you have working fire alarms. Be sure this information is correct on your policy.
  • If you live in an older home, be sure your policy covers the cost to replace the home. Some older homes may require additional coverage.
  • Your belongings. Most homeowner insurance also covers your belongings, including the contents of your garage. But there may be limits. Read your policy to find out if it covers out-buildings and landscaping.
  • Understand the difference between replacement cost and actual cash value. Replacement costs will cover the cost of new items, while actual cash value only covers what your items were actually worth. For example, if your refrigerator is ten years old, the insurance will only cover a fraction of what a new refrigerator costs. Read your policy to find out what type of coverage you have on your belongings.
  • Take an inventory of your home. An inventory will prove essential in filing insurance claims or seeking financial assistance after a fire.
  • Living expenses. Your insurance policy should cover living expenses if you are displaced from your home. Check your policy for details.
  • Consider renter's insurance if you rent or live in installation housing. Your landlord's insurance will not cover your belongings in the event of a fire. Renter's insurance will cover your personal belongings in a disaster, and will provide coverage when you move or when your belongings are in storage.

For more information on protecting yourself and your belongings in the event of a fire, visit the National Fire Protection Association website, Firewise.


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