General Insurance
Having a home fire may not be something on the minds of homeowners and families as they go about their daily business. This is also not something that may be considered by business owners. Having a fire in the home can easily destroy a home and make it unlivable, as well as cause damage to, or completely destroy a family’s personal belongings. While insurance may not be able to replace the sentimental value of these personal items, it can help replace their value. Fire insurance is a coverage that each home or business owner should make themselves aware of.
What is it?
Fire insurance coverage is generally provided as part of a homeowners or business insurance policy and is a form of property insurance. It protects a person or family from the financial loss of having fire damage or a home or business destroyed due to fire. It is normally spoke about in terms or homeowners insurance most often. Coverage is provided under the standard policy for the home its self, outlying structures (such as a shed or barn), personal property, and loss of use. The limits of coverage and any exclusions are different for each policy offered by different companies and should be reviewed by the homeowner to see if there are any gaps in coverage.
How does it work?
Fire insurance coverage would pay the insured in the event a fire damaged their home or business. It generally pays for the actual cash value of property and may not include coverage for rebuilding a building with updated codes. Additional coverage should be purchased for this. In the situation that a home was burned down, the insurance coverage would pay up to the limit or current value of the home to pay for repairs or replacement. It would also pay for damages to structures such as a barn on the property. It would pay for the family’s personal belongings, clothes, furniture, and some coverage for electronics and valuables. It would also pay for some of the expenses that a family would incur staying at a home while they are waiting to purchase a new home or acquire a new residence.
How much do I need?
One important thing to review on a fire insurance policy is its limitations, as endorsements can often be purchased to gain more coverage in needed areas. Areas that are often limited under a standard home fire policy include jewelry, furs, firearms, and computer equipment. It is also a difficult task to inventory a home to note all the items would need to be replaced if a fire were to occur. Having a home appraised every so often and reviewing this information with the insurance company to ensure that the limit is adequate, but not too high, for the dwelling is also a good idea. If a home has outlying structures, the insured will also want to review the policy, as the coverage is generally only up to a certain percentage of the limit for the dwelling structure.
Expert Tips and Info
A great way for a homeowner to take inventory of their home is to use a video camera to create a movie that shows the items in their home, the exterior of the home and any structures on the property. The completed video can be kept either at a work place or at a friend of family members home.