What is fire insurance?
Most homeowners have fire insurance, but few truly understand what it is and how it works. We spoke with two experts in the field to get an accurate definition. The first is fire insurance expert Dave Peterson who has practiced in the insurance industry for over 30 years and acts as an expert witness on behalf of plaintiffs. The second is Advocate Law Group partner Bob Scott, who has also practiced in the insurance industry for over 30 years and is a champion of consumer rights. Here’s what they had to say: Dave Peterson: Generally, insurance policies are broken down into four areas. One is the insuring agreement. The second are the definitions. The third would be exclusions, and the fourth would be conditions. Every fire policy – almost every fire policy – has four areas of coverage. The first area would be the dwelling. The second area would be other structures like a detached garage, gazebo, guest house, etc. The third area is personal property – the property that the insured would
Fire insurance is a form of property insurance which protects people from the costs incurred by fires. When a structure is covered by fire insurance, the insurance policy will pay out in the event that the structure is damaged or destroyed by fire. Some standard property insurance policies include fire insurance in their coverage, while in other cases, fire insurance may need to be purchased separately. Property owners should check with their insurance companies if they are not sure whether or not fire insurance is part of their policies, and if fire insurance is not included, it should be purchased. Depending on the terms of the policy, fire insurance may pay out the actual value of the property after the fire, or it may pay out the replacement value. In a replacement value policy, the structure will be replaced in the event of a fire, whether it has depreciated or appreciated: in other words, if homeowners purchase a home and the value increases, as long as it is covered by a replace
Fire insurance (or dwelling insurance) protects your home against losses due to fire or lightning. It generally does not protect against other losses such as theft or personal liability for injuries to others. Although losses due to the risk of fire is included in all Homeowners policies, it can also be purchased separately.
