In the event of a home fire, you may be surprised to know that just because something burns, it doesn’t mean you automatically get coverage for it. Your homeowners’ insurance provider will consider two major things when trying to determine whether or not you receive reimbursement: what started the fire and what was damaged.
If the way the fire was started doesn’t meet their (often overly strict) criteria, or the personal belongings that got affected don’t fall under their covered categories, then your claim will be denied, and you’ll be stuck paying out-of-pocket. Read on to learn more about what exclusions to look out for and how you can take preventative measures to stop them from happening.
What Types of Fire Does Your Homeowner’s Insurance Not Cover?
This may come as a surprise, but not all fire is created equally. (At least not in the eyes of your insurance provider.) There are certain types of fire your homeowner’s insurance won’t provide coverage for, no matter what is damaged or the extent of the destruction.
Fire Caused Intentionally (Arson)
If your insurance company has any reason to suspect that a fire was started intentionally, they will deny your claim, leaving you without coverage. This can happen when your insurance company is investigating the fire, and they find evidence that points to intentional fire-setting (either by you or someone associated with you).
That’s because homeowner’s insurance policies are designed to only cover accidental or unexpected fires, meaning nothing with intent. Sometimes, however, insurance companies will incorrectly claim a fire was started on purpose. Unfortunately, this puts the burden of proof on you, the policyholder, to prove you did not commit arson.
Fire Caused by Negligence
Most homeowner’s insurance policies contain a legal obligation known as “duty of care,” which means the policyholder is required to take reasonable care of their property (i.e., not be negligent) in order to receive coverage in the event of a fire. If there’s a fire in your home and your insurance company feels as though you aren’t fulfilling your “duty of care,” they will investigate the cause of the fire and try to determine whether or not your negligence is what caused it.
Some examples of negligence include:
- Not repairing faulty electrical wiring
- Failure to maintain working smoke detectors
- Building code violations
- Improperly stored flammable materials
- Overloaded electrical outlets
- Leaving the stove on unattended
If your insurance company finds that the fire in your home was caused by negligence, then your claim will likely be denied. In order to prevent this from happening, prioritize making timely repairs and scheduling yearly maintenance.
Fire In Vacant Homes
If you own a vacant home that catches on fire, your homeowner’s insurance likely won’t cover the damage. Examples of vacant homes include properties that are for sale, under construction, abandoned, or have been left unoccupied for anywhere from 30 to 60 days. (The exact amount of time depends on your policy.)
If you’re planning on leaving your home unoccupied for an extended period of time, such as with seasonal properties or inherited homes that have yet to be moved into, you may be required to notify your insurer. Otherwise, you’ll want to purchase vacant property insurance to protect yourself in the event of a fire.
Fire Caused by Excluded Perils
Most homeowners’ policies protect your belongings and property against damage from specific events listed in the policy, known as “perils.” However, if a fire is caused by an event that is an “excluded peril,” you likely won’t receive coverage. Examples of excluded fire perils include:
- Fires caused by acts of war
- Fires caused by nuclear hazards
- Fires caused by power surges from your utility company
- Fires caused by certain natural disasters (i.e., an earthquake damaging power lines)
Although these types of fire don’t happen often, that doesn’t mean you can’t protect yourself in the rare instance they do. You may have the option to extend your homeowner’s insurance coverage to “open perils” or “special perils.” With this coverage, your insurer will cover fire damage from any cause not explicitly excluded in your policy.
What Types of Personal Items Are Not Covered by Your Homeowner’s Insurance in the Event of a Fire?
So now that you know what types of fires aren’t covered by your homeowner’s insurance, it’s time to learn what property isn’t covered either. Because even if the way the fire started is covered, that doesn’t mean all your damaged belongings automatically are, too.
Valuables (Above Certain Coverage Limits)
Your home likely contains at least a handful of valuable pieces of jewelry, art, or collectibles. However, no matter their worth, most of your belongings are only covered up to a certain cost point, and it’s typically capped at around $1,000 to $2,000 per item.
This means that if a pricier item on your property gets damaged in a fire, you won’t be reimbursed for the whole thing. If this is something you want to avoid, you may want to consider purchasing extra “personal articles floater” insurance, which offers additional protection to items not completely covered by homeowner’s insurance.
Business Inventory
If you’re operating a business out of your home or are using your home to store items for your business, then those items likely have very limited coverage (typically up to $2,500 total) or even none at all. This means that in the event of a fire, if those items for your business get damaged, you won’t be fully reimbursed unless you purchase an additional business insurance add-on.
Examples of business inventory include:
- Products for sale
- Partially finished products
- Raw materials
- Tools for production
- Packaging supplies
Cash
If you’ve got a big stack of cash sewn into your mattress or hidden under the floorboards, you may want to rethink bringing it to the bank. Cash has a very low coverage limit (usually up to $200, if at all), which means that you won’t be reimbursed if it gets burned.
To prevent this from happening, it’s recommended that you purchase a fireproof safe to store big sums. It’s also important to note that, according to FEMA, if your money is only partially burnt (i.e., at least half or more is still okay), you can take it to your regional Federal Reserve Bank to get it replaced. (If you’re not sure where your Federal Reserve bank is, ask your bank for the one nearest you.) You can also send your burnt money to the U.S. Department of the Treasury.
Unsure What’s Covered by Your Insurance After a Fire? Contact Fortitude Today
If you’ve suffered a devastating house fire and are unsure whether or not your insurance provider is going to give you sufficient coverage, then don’t wait: contact Fortitude Public Adjusters today. We’re here to help streamline the claims process and ensure your rights as a policyholder are protected. After all, we’re Wisconsin’s most trusted insurance professionals for a reason.
