What Will My Insurance Company Cover In a Fire?

--Each insurance policy is different.--
You will need to speak with your insurance adjuster to determine 
exactly what your insurance company covers in a fire.

The huge firetruck screeched to a halt. The Fire Chief barked orders and the crew flawlessly connected hoses to the hydrant, snaked them across the yard and water began to pour onto the burning house. Paul marveled at the sight, until the realization that this was his house snapped him back into reality. In less than half an hour it was over. Eighteen years of sweat equity, repairs and pride was reduced to a smoldering, sagging shell. He had insurance, but Paul had no idea who it was with, what was covered or where to start.


The first thing to do to determine what is covered in a fire loss is to speak with your agent.  Your agent will be able to tell you who the insurance company is and how to contact them.  Often, your agent can file your claim for you, sometimes they can't and you will have to do it yourself.


After the fire is over, you may not be able to find your policy or remember who the company was, but you should have your agent's name and phone number recorded in phone, Rolodex or some other place you store your contact's names and phone numbers.  It is always a good practice to have these special numbers in different locations, such as; work, with a friend or another family member's home.  

Fire insurance was actually the first type of insurance available to home owners. You will find that most insurance companies cover all the damages that result from a fire. This includes demolition, cleaning, repairing and rebuilding the structure as well as, replacing damaged furnishings and contents.



Demolition - This is the process of removing the debris from your home.  It can include; framing, drywall, insulation, carpeting as well as damaged furniture and clothing.  Those items that are nailed down are generally referred to as "property" and what is not nailed down, are "contents" or "personal property".  Labor, materials and dumpsters to haul off this debris is usually covered.


Cleaning - Most fires do not completely destroy a home.  Part, if not all of the structure, can be cleaned and repaired.  Cleaning consists of more than just wiping the black off with a wet cloth.  Special grease cutting agents are used and proper protocol, including the direction and way to wipe, are needed to do the job right. 


Cleaning is usually cheaper than replacement, so insurance companies are generally eager to try cleaning first, if it is a viable option, then look at replacement.


Sealing - After the structure is cleaned, there may still be staining and/or odor.  The staining can result from either chemical changes to the exterior finish from the heat or the soot particles can enter the pores of the surface when they open from the intense heat.  Regardless of the reason, the remaining staining or odor will not come out.  Special sealers are applied to these surfaces to trap or encapsulate the staining and odors.  



Repairing/Rebuilding - Once the debris is removed and the remaining structure cleaned and sealed, the repairs can begin.  Your insurance will usually pay to put the structure back exactly as it was before the fire occurred.  This includes the same design and materials that were originally used.  It is possible to change colors, materials or finishes as long as the total cost of repairs is equal to, or less than, what was there before the fire.


That said, an owner has the right to rebuild their home how ever they choose, including a complete remodel or extensive additions.  If this is the case, your insurance company is usually only obligated to pay the cost to put your home back to its pre-loss condition.  Any costs that exceed this would be borne by the owner.

Furnishing and Contents - While most homeowners will look at furniture and clothing as different items, the insurance company considers them all "contents".  Most companies have a "new for old" replacement clause for homeowner policies.  This means that any piece of content that was damaged, as long as it is still serviceable, will be replaced at the current replacement cost with a new item.


Some policies for businesses, rentals, condos, or assigned risks, do not have "new for old" replacement clauses.  It is wise to examine your policy before a loss to determine what your potential risks actually are in this situation.  Many times it is much greater than the policy holder assumed.


You will be required to generate a complete list of all the damaged items, with the replacement cost, and submit it to the adjuster for review and payment.  In the event of a large loss or other extenuating circumstances, the insurance company may pay for the services of a qualified restoration company to help generate this list.


Some policies also have a code upgrade rider available, to pay for additional costs needed to bring the structure up to current building code requirements.


Payment - You will generally be paid in steps during the repair process, upon verification of the loss and costs.  Checks are often issued to you for:

• Emergency Needs - Emergency purchases of new clothing, food or lodging.
• Additional Living Expenses - Payment for all additional expenses incurred as a result of the fire, i.e., lodging, food, etc.
• Contents - Payment for replacement of these damaged items.  
• Construction Draws - For small jobs, this can be the entire amount of repairs, for large jobs, it can be various percentages of the total cost that are paid as benchmarks are reached.
• Final Payment - At the end of the job, items that were not anticipated in the beginning or already paid, are examined and reviewed so that final payment can be given to you. 

Again, every insurance company and policy are different.  

You will need to discuss with your agent or adjuster
to determine exactly what is covered by a fire and
how much money is allowed for the various categories.