Many people have seen how every fire season, there are wildfires throughout the United States that endanger people’s homes. Particularly in Southern California, wildfires seem to be very dangerous and something that people there need to be aware of and protect against. These fires are a reminder that everyone who has homeowners insurance needs to be aware if they are covered for fire under their homeowners insurance policy. Fire insurance that protects your dwelling can be included in your homeowners insurance as a “named peril” or it may also be purchased as a separate policy or rider on the homeowners policy. To save money, some people buy Dwelling Fire (DP-1) policy which protects you from dangers that you specify, such as lightning or wildfire.
Homeowners Insurance Fire Policy
Generally speaking, most homeowners insurance policies will compensate you for fire damage to your home – for many of the reasons that fire may damage your home such as accident, faulty wiring, windstorm, volcano eruption, etc. However, it is also possible that some causes of fire damage can be excluded such as an earthquake – which means that if your home suffers fire damage due to the result of an earthquake, you will be refused compensation unless specific earthquake insurance is covered. This is a stark reminder that homeowners need to be aware of specific limitations in their homeowners policy and make sure that they have the specific fire, flood, earthquake or umbrella policy coverage that they want.
Not All Fire Insurance Policies Are Equal
Obviously, different insurance companies have different fire insurance policies with similar but different coverages. Some policies may give you the cash value of the property that you lost, while others will give you the replacement value of the property you lost. Generally speaking, replacement value is more common unless people own expensive are or jewelry, because the limits on these items are set by the insurance company. Also, keep in mind that you probably won’t get the full value of your home unless your policy reflects any recent expensive upgrades to the home.
Estimating Fire Damage
Fire damage can completely destroy a home or just cause minor damage to a home. Many times, when fire damages a home the losses are hard to pinpoint exactly — so they are estimated. One thing you can do to help estimate the dollar loss caused by a house fire is to keep accurate records of the possessions in your home and review your fire insurance policy at least annually as well as keep detailed records of what you have in your home. Videotaping your posessions is an easy and effective way to document the possessions that you have and you can keep multiple copies of the videotape in different locations.