Are You Fully Prepared for a Fire in Your Home?

Are You Fully Prepared for a Fire in Your Home?

July 27, 2020
Share |

Can you name four essential lines of defense you should have against the risk of a fire in your home?

First, you should have smoke alarms strategically located around your home, testing them and changing the batteries regularly (according to maker's instructions).

Second, you should have the means to deal with a minor fire -- for example, multiple fire extinguishers, and the know-how for using them and other types of protection safely and effectively.

Third, you need an escape plan and know when and how to evacuate. Everyone who lives in or stays at your home should know the drill. Experts suggest you should regularly practice your escape plan so everyone knows what to do.

There are plenty of free templates online. Or, for more help, see this guide from the National Fire Protection Association:

Fourth, you should have fire insurance. Because no matter how safety-minded you are, and how well you're equipped to deal with a blaze, fires happen. If you don't have fire protection insurance, you could find yourself in serious financial trouble.

Every year, thousands of home fires in Colorado send hundreds of people to emergency rooms or, sadly, in some cases, the morgue. Nationwide, fire departments receive a fire call-out every 63 seconds, and almost three quarters of all fire deaths happen in home blazes. On average, there are over 350,000 home fires in the US every year.

Obviously, personal safety is your number one protection priority. But if you don’t have fire insurance, the financial consequences of a home fire could be with you for the rest of your life.

What Does Fire Insurance Cover?

There was a time when home fire insurance was a common standalone policy. There were insurance companies who specialize in this risk.

Not so much these days,

Most fire coverage is a standard feature of a home insurance policy. This can cover the structure of your home, if you own it, and all the personal property inside it. It may also protect against your liability for bodily injury or damage resulting from a home blaze.

Coverage often also extends to the cost of rectifying smoke or water damage resulting from a fire and the efforts to extinguish it. Sheds and other outbuildings may also be insured, as well as landscaping damage.

On the other hand, cars and other vehicles are not protected. You need auto insurance with comprehensive coverage for this.

Most causes of fire are protected against, including electrical faults, gas leaks, accidents such as kitchen fires, and most natural perils such as lightning. Malicious damage coverage depends on who started the fire. If it's an outside arson attack, the policyholder is usually covered -- but not if they started the fire themselves!

In addition, your policy should meet the cost of temporary accommodation and meals, while your home is repaired or rebuilt.

You likely also will have the choice of whether your policy is based on the present value of anything that's damaged or destroyed, on whether you're covered for the full replacement cost. 

That's fine… up to a point.

But most standard home insurance policies set a limit on the amount of coverage they provide. If this figure hasn't been updated recently, that level of coverage may not be enough to meet your needs.

There are a number of ways you can deal with this.

First, you should carry out a detailed inventory of your personal property. Then, you should establish the cost of rebuilding your home. Note that this is the figure insurers normally use, not the market value (though some may prefer the latter).

These numbers must add up to the approximate ceilings set by your home insurance policy, which will be shown for structure and contents separately.

If they don't add up, you might be able to raise the limits specified in your policy. If you do this, don’t forget to check your liability coverage is sufficient. Talk this through with your agent. If you agree it's not enough, it could be that an umbrella policy, which kicks in after your liability limits are breached, is the solution.

Finally, you may want to consider standalone fire insurance.

In rare cases, some home insurance policies actually exclude fire damage among the insured risks. Now is the time to check your policy. If it's not included in your home insurance, or if you think it may be adequate, discuss this with your agent.

Here at Equity Insurance Group, we are more than happy to discuss your needs, without cost or obligation, to ensure your coverage is right for you and your budget.

How Much Does Fire Insurance Cost?

This will depend on a number of factors, such as the cost of rectifying any damage or loss to the structure and contents of your home, whether you choose replacement or current value coverage, and the financial limits set by the insurer.

Other influencing factors include the risk of forest fires, the type of roofing materials -- for example, wooden shingles are more risky than concrete tiles -- and the level of deductible (the amount you pay out of your own pocket before the insurance policy pays out. In risky areas this can be as much as $2,000 per incident).

On the plus side, a good agent should be able to negotiate discounts, for example for multiple policies or higher deductibles, Also, an independent agent like Equity can shop around for the best value and right coverage.

So, while it's not possible to talk precise number, an average homeowners policy that includes fire coverage, in the Denver area for $300,000 home and contents coverage and the same amount for liability, will run out between $2,000 and $6,000 a year.

Standalone fire insurance is very rare, and quotes accordingly vary widely.

Who Needs Fire Insurance?

If you own your home, you need fire insurance. It's as simple as that. But you also need it if you rent your home or if you own a condo or other type of second home. Landlords, naturally, must also insure the structure of their properties against fire.

Does a renter need fire insurance? Yes. Because, while your landlord insures the structure of you home, he almost certainly hasn’t insured the contents. That's usually down to you, with renters insurance that's usually available at low cost.

And fire insurance for a condo or second home likely won't be provided by your main home coverage. You need a second policy or have the second home protection as an endorsement to your main policy.

How Can I Get Fire Insurance?

It's easily and quickly arranged via your insurance agent. Speak to the friendly professionals at Equity Insurance Group for more information.