Does Homeowners Insurance Cover Fires?
Your home is probably the costliest thing you’ll ever buy in your life and your most important investment.
According to the National Fire Protection Association, an average of 355,400 residential fires happen each year.
And, fires often start unwittingly from seemingly innocuous situations.
If you have electrical issues in your house that are unresolved, that can cause a fire.
If you leave a lit candle unattended and it falls, that can also cause a fire. However, fires can start from faulty appliances, gas lines, and home electronics like space heaters and toasters.
Fire and smoke-related damages are one of the top causes of severe claims, as Travelers Insurance put it.
As such, being prepared is a good idea, and that includes knowing what your home insurance policy covers and how much protection it may provide in case you incur losses due to a fire.
Does Homeowners Insurance Cover Fires?
Homeowners insurance protects damages resulting from an accidental fire.
The good news is that you don’t have to pay extra for fire coverage.
Fire, as well as smoke damage caused by fire, is included as standard in almost any basic homeowners insurance.
If you have a mortgage on your home, it is required by your lender that you have homeowners insurance so that the lender can protect its investment from unexpected or unforeseen hazards.
If you own your home outright, it’s your choice to purchase homeowners insurance.
So for the most part, homeowners don’t need to purchase an extra fire insurance policy.
In most cases, homeowners insurance has named perils, which are things you couldn’t have foreseen that causes damage or loss to your property, like fires.
That’s just one covered peril that the basic policy has.
Other covered perils include protection from the weather like lightning strikes, windstorms, and hail, the weight of snow or ice on your home, or on outdoor free-standing structures like a pool house.
The Best Homeowners Insurance Companies with Excellent Fire Damage Coverage
Since most homeowner policies cover fire damage, choosing the best fire insurance companies starts with choosing the best home insurance companies.
Once you know the value of your home and have tallied up the cost of your personal belongings, you will know if your homeowners policy gives you enough coverage to protect your assets or if you need to add additional coverage.
That said, we’ve picked five of the best homeowners insurance companies that have a wealth of experience in dealing with fires.
- Lemonade: Best for Low-Cost Add-Ons
- Amica Mutual: Best For 100 Years of Coverage
- Safeco: Best for Replacement Cost Coverage
- Travelers Insurance: Best For Low Complaints
State Farm: Best For Wildfire Response Service
Lemonade: Best for Low-Cost Add-Ons
- Accepted by all major lenders.
- No paperwork or phone calls are required.
Lemonade insurance, powered by AI, only does business online or through its intuitive app.
There are no agents or customer service, but that is why the insurer can offer affordable homeowners insurance policies.
Lemonade’s homeowners insurance is good to have because despite having very cheap rates, it still covers you if your home is damaged or destroyed by a fire.
Its fire coverage includes not just damage from house fires but also damage from wildfires.
In addition, the insurer pays for loss of use if your home becomes inhabitable from fire damage or smoke damage, both of which can put your health at risk.
This means that Lemonade will pay for your basic living expenses, such as if you need a place to stay like a hotel or if you need meal coverage from a restaurant or similar establishment.
Additional living expenses are sustained while your home is being rebuilt or repaired after the fire.
As for its add-ons, Lemonade has plenty. Some include:
- You can buy extra coverage to fully cover your valuables, such as jewelry or fine art.
- You can get coverage for water backup damage caused by a drain or sewer backing up.
- Extended reconstruction cost if the cost to rebuild your home after a covered peril is higher than your dwelling limit.
- If someone is injured while swimming in your pool and the person sues you, this add-on will pay for any lawsuits.
- Daycare liability for those caring for other people’s children in their home.
- Equipment breakdown coverage if your appliances stop working due to mechanical failures.
|J.D. Power (out of 1,000)||870|
|NAIC Complaint Index||1.94|
Amica Mutual: Best For 100 Years of Coverage
Amica has been rated #1 with JD Power for 18 years, which no insurance company out there can compare.
We chose Amica because it is the most experienced leader when it comes to fire coverage.
It has offered fire insurance for more than 100 years.
The company offers more than fire protection.
For example, Amica features up to 30% more home replacement coverage than a standard policy.
You also can choose a higher coverage limit to replace valuables that a standard policy can’t fully cover.
This is exactly what you need in fire insurance, the ability to add on more comprehensive coverage so that your belongings are fully covered.
|J.D. Power (out of 1,000)||849|
|A.M. Best - Financial Strength Rating||A+|
|NAIC Complaint Index||0.32|
Safeco: Best for Replacement Cost Coverage
Safeco is a nationally recognized insurer backed by the high-profile insurance company Liberty Mutual.
Safeco was our top choice for fire coverage because it offers policyholders replacement cost.
Replacement cost means that the cost to replace your personal belongings after a fire will be of similar type and quality.
This means that Safeco will reimburse you for your belongings using today’s prices.
This is unlike ACV, where you get the depreciated value of your property that will not fully cover replacing it.
With Safeco, replacement cost is purchased as an endorsement and will increase your home’s coverage limits by an additional 25% or 50% if the cost to rebuild your house exceeds the amount of dwelling coverage you have.
For those who live in California, replacement cost is essential since that state is prone to wildfires.
Safeco also sells a Premier Plan that includes guaranteed replacement cost, which will pay if you need to rebuild your home after fire damage regardless of the price.
|J.D. Power (out of 1,000)||809|
|A.M. Best - Financial Strength Rating||A|
|NAIC Complaint Index||1.22|
Travelers: Best For Low Complaints
- Multi-Policy Discount.
- Loss-Free Discount.
- Protective Device Discount.
Travelers has sufficient knowledge in covering fire damage.
The insurer also has a strong financial strength according to AM Best.
This means that it is well-endowed and will be able to reimburse you for
a claim in a timely manner and not months after filing.
Besides having great fire coverage, Travelers stands out because it has
low home insurance complaints, which means the company has far fewer complaints in comparison with similar homeowners insurance companies.
That’s according to the NAIC, which gave Travelers a complaint index of 0.99.
|J.D. Power (out of 1,000)||794|
|A.M. Best - Financial Strength Rating||A++|
|NAIC Complaint Index||3.88|
State Farm: Best For Wildfire Response Service
State Farm is now offering added wildfire protection in California (as well as Arizona and Washington), the state that is most susceptible to wildfires.
This policy is called the Wildfire Response Endorsement, and the best thing about it is that it covers wildfire in State Farm’s basic homeowners insurance policy at no additional cost.
Wildfire Response Endorsement is an added layer of protection.
State Farm sends out teams of professional wildfire experts in real-time to protect covered properties in the path of active wildfires.
To mitigate wildfire at a customer’s home, the experts will do the following, plus much more.
- Install temporary sprinkler systems
- Monitor and extinguish hotspots
- Remove brush, combustible vegetation, and debris
- Seal all doors and windows
|J.D. Power (out of 1,000)||829|
|A.M. Best - Financial Strength Rating||A++|
|NAIC Complaint Index||1.77|
How We Decided
We gathered information from multiple trusted sites in homeowners insurance and the websites of insurance companies and narrowed our search by prioritizing the following:
Even if you can’t anticipate a fire happening, it’s always best to be prepared.
So, we made sure that our top picks had enough coverage in their homeowners insurance policies should you have to file a claim after a fire damages or destroys your house.
In addition, we looked at endorsements that could extend coverage for fire damages so that your destroyed personal property can be fully protected.
We also turned to companies that offered no limits on personal property coverage.
All homeowners insurance companies offer discounts, and if they had many, this could lower a policyholder’s premium significantly.
So, the number of discounts a company had helped us narrow our list when it came to pricing.
We reviewed published consumer ratings and reviews of homeowners insurance providers.
We spent a good amount of time looking at customer ratings from the BBB and AM Best.
Insurers with a number of quality consumer ratings and reviews were included in our list.
How Does Fire Insurance Work?
Fire insurance is a type of homeowners insurance that covers fire damage to your home, other structures, outbuildings on your property like a shed or a detached garage, and your personal property, including expensive items like jewelry, but only up to the policy limit.
What you also get from a typical fire insurance policy is additional coverage for smoke or water damage to your home and your personal effects.
This isn’t covered by a standard home or renters insurance policy.
What Does Fire Insurance Cover in a Standard Homeowners Insurance Policy?
With basic homeowners insurance, fire insurance typically covers fires from things like faulty wiring, electrical problems, gas explosions, bursting water tanks, and some natural disasters like lightning.
Unattended candles and appliances like a stove are also covered.
If you knock over a candle by accident, the resulting fire will be covered by your home insurance policy.
That’s because fire insurance covers damages if you accidentally cause a fire.
The number one reason why home fires happen is due to unattended cooking, according to the National Fire Protection Association (NFPA).
You should always remain in the kitchen, or have someone who can, when cooking on a stove or broiling a chicken in the oven.
Cooking fires are also covered.
Another cause of home fires is electrical fires.
The most common electrical fire is the use of electric blankets, followed by a tipped portable heater and a kerosene heater.
Your homeowners insurance also covers smoke damage.
But the smoke doesn’t need to come from a fire within your home.
Smoke damage to your home from a neighbor’s fire is also covered.
The dwelling coverage in your standard policy pays to rebuild or repair your home if it’s destroyed by fire or smoke, up to your policy’s limits.
Other Structures Coverage
Your home is not the only thing your fire policy protects.
It also protects structures on your property, most of which are detached, such as sheds, stand-alone garages, and pool houses.
In addition, fences, arbors, and pergolas are covered, and some insurers cover landscape damage.
This protects against lawsuits and related damages for a fire that spreads from your property to your neighbor’s property.
If a fire starts in your home while you entertain guests, hospital bills will be covered if these guest hurts their legs or arms, for example, when trying to escape from your house fire.
Personal Property Coverage
Your personal property coverage pays to replace clothes, electronics, furniture, and many other belongings if a fire destroys them.
Additional Living Expenses
Also called “loss of use,” this coverage kicks in when your home is destroyed in a fire and becomes uninhabitable.
So, if you can’t live in your home due to smoke inhalation, or total room destructions, or if you need to live elsewhere while your home is being rebuilt, loss of you will cover your basic living expenses like your hotel stays and meals as well as necessary living expenses such as gas, toiletries, and laundry services.
Do You Need to Buy Extra Coverage?
Since your home or renters insurance already covers fires, the question that may be lingering in your mind is why would you even need fire insurance.
Look at it this way.
Many customers who have homeowners or renters insurance schedule their personal property, meaning they pay extra to fully cover their items.
This add-on is like fire insurance, which covers damages above your personal property limit, or the max amount your insurance will pay.
If your house burns down, reconstruction costs aren’t entirely covered under your standard insurance policy.
In other words, your homeowners insurance policy may not pay out enough to cover replacement and reconstruction costs after a fire.
For example, if your home is worth $400,000 and your insurance company only covers up to $150,000, you will need to increase the amount of dwelling coverage and pay a higher premium.
Also, adding an additional fire insurance policy will cover smoke or water damage that isn’t covered by your standard homeowners insurance company.
In addition, a fire policy can give you peace of mind that you’ll be covered when wildfire damages your home, or when you are cooking something in your oven and leave the appliance unattended.
What Does Fire Insurance Not Cover?
Fire insurance doesn’t cover fires caused by war or nuclear radiation or contamination.
Intentionally setting your own home on fire is not covered as well and would be considered insurance fraud and a serious federal crime.
In addition, if there’s a fire in your home that’s due to gross negligence, that’s not covered too.
Also, if your home remained vacant or empty for more than 30 consecutive days and this home is insured, fire insurance won’t cover it.
However, you may be able to purchase a vacant homeowners insurance policy to cover a vacant home.
Best Reasons to Purchase Additional Fire Coverage
Insurance companies offer “dwelling fire” coverage. This is what fire insurance is called.
And then there are standalone insurance companies sold to you by an insurer that exclusively deals with fire protection.
Because fires are part of your standard homeowners insurance, your insurer may only pay up to your policy limits.
In that case, you may have to pay out-of-pocket to get full coverage after a fire.
But if you had fire insurance that you’ve added to your homeowners insurance policy and pay extra for, you will be protected in full.
If you live in an old home, chances are the electrical wiring in your house hasn’t been updated. This can lead to a fire.
Note that if your old home complies with new building codes, you’ll have less of a chance of a fire happening,
If you have expensive or priceless belongings like jewelry, fine art, a first-edition book collection, and furniture, you may want extra fire coverage to fully cover them.
Or you can get additional personal property coverage because replacing your items may exceed the limits of your standard policy.
Also, because insurers often place limits on insuring expensive items, you may want to schedule your jewelry, for example, to protect them in full.
Highly Customized Home
If your home is “highly customized,” meaning it has special architectural details, rare features, and has been updated or renovated to the extent that these things become difficult to replace after a fire, you may want to purchase extended replacement cost coverage.
For example, if the following happens, you need replacement cost coverage if rebuilding your house becomes pricier and goes over your policy limits.
Building materials become costly or become in short supply.
If construction costs rise.
If contractors and other construction workers become scarce.
Replacement Cost and Actual Cash Value (ACV)
Most standard homeowners insurance policies come with actual cash value or ACV.
Personal belongings like expensive laptops, smartphones, and smart TVs become less valuable over time due to normal wear and tear. They can even become obsolete because newer models of your electronics may come out.
So, if your personal belongings are ruined due to a fire, ACV will pay you for the depreciated costs, which means that an insurer’s ACV will only reimburse you for the amount that your property was worth at the time of the fire.
This means you will receive less than that what you paid for your items.
Replacement cost coverage is better because it will pay for your damaged items at today’s cost.
However, replacement cost is an add-on or an additional expense that does not come standard in your basic policy.
This means you will pay extra if you select replacement cost.
Fire Coverage For At-Risk Wildfire Areas
The most important reason to get fire insurance is if you live in a fire-prone area.
The most susceptible state is California, which has a number of annual wildfires and often results in destruction.
However, a number of neighboring states such as Oregon, Washington, New Mexico, and Colorado are also reguarly vulnerable.
These wildfires, whether human-caused or natural, scorch acres that are not just limited to the above-mentioned state.
Other states such as Florida, Nevada, Texas, Oklahoma, Idaho, Wyoming, Utah, and Arizona have experienced their fair share of wildfires and brushfires.
In addition to wildfires, fire-prone areas are places like living near canyons or living too close to brush.
Also, you’re more at risk of having a fire if you live far from a fire station or a fire hydrant.
Note that if you live in an area where wildfires are common, you may be subject to coverage limitations.
In addition, an insurer may not extend fire coverage to you because of your constant risk.
In such a situation, this is another reason why you may need additional fire protection.
Some insurers will allow for the coverage but will charge you a higher premium.
Purchasing fire insurance is a good idea if:
- The value of your property exceeds what your insurance company will cover you for.
- You live in an area where fires are very common and you need additional protection.
What is Fair Access to Insurance Requirements (FAIR)?
If your insurer will charge you a higher premium, FAIR may be able to help.
FAIR provides fire insurance coverage when you don’t qualify for a standalone fire insurance company or “dwelling fire” coverage.
But note that FAIR may not be the best solution. Often it costs more than insurance policies and has less coverage.
How Much Does It Cost to Fix or Repair Fire Damage?
After a fire, and after you report it to your insurer and the insurer sends out a professional to assess the damages, the next step is to find a company that specializes in cleaning up fire damage.
To find a restoration specialist, it may be helpful to check out its customer satisfaction ratings on sites like Google, Angie’s List. or the BBB.
Such a company will clean and restore furniture, electronics, clothing, and other property you own after they are damaged by smoke or water.
An example of water damage that is covered would be if a fire causes one of your pipes to burst.
The cost of repairing fire damage depends on the extent of the damage and the state you live in.
That said, fire damage repair typically costs homeowners between $3,157 and $29,118, and the national average is $13,761.
To clean up a destroyed house due to a fire, here are the breakdown and typical price ranges provided by Lemonade insurance.
- Water Damage and Cleanup $1,000-$3,900
- Repair Chemical Contamination $1,000-$2,500
- Soot Removal $2,000-$6,000
- Furniture and Textile Deodorizing $200-$1,000
- Ozone Smoke Removal $200-$500
Are There Ways to Prevent a Fire in Your Home?
Yes, and there are many. If you do the below, you can minimize a fire in your home.
Install fire extinguishers and smoke detectors.
Enlist a professional to inspect your heating source every year or so.
Keep your appliances clean and never leave cooking food unattended.
Have an electrician look at the electrical systems in your home.
Never leave lit candles unattended.
Lights and lamps that are burning for many hours should be minimized.
Have a chimney inspector inspect your fireplace.
Always make sure that your electric appliances are UL-listed.