Fire insurance is a specific form of property insurance. Fire insurance is just that, it protects those that endure costs/losses by fire. When a structure is one that is covered by fire insurance the insurance policy is going to pay out when the structure is damaged or a catastrophic loss occurs to the structure.

Make Sure You Purchase/Have Fire Insurance

There are some standard property insurance policies that will include the fire insurance coverage in their policies automatically while others will necessitate the need to purchase it separately. Fire insurance is one of those things that you think you’ll never use but you should have.

Make sure when you’re talking with your insurance agent that you find out if the policy he is quoting for you has fire insurance or if you need to purchase it as a separate add on. If you already have an insurance policy purchased make sure you call your insurance company to find out if fire insurance is part of your policy, if it isn’t than you need to purchase it.

Policy Specifics

The fire insurance is going to pay out in either actual cash value (ACV) or replacement cost value (RCV) depending on the terms of your specific policy.

In the RCV policy the house or structure is going to be replaced regardless of appreciation or depreciation. In the ACV the house or structure is going to be covered less any depreciation.

You will find that in most insurance policies are going to have coverage limits that may need some adjustment as the property values either rise or fall.

Depending on your policy terms the contents of the home or the structure can also be covered during the event of a fire. You’ll also find that some policies are going to allow for a living allowance that will allow the fire victim(s) to be able to rent some temporary housing while their home is being repaired or replaced.

Additional clauses to an insurance policy will in turn make the policy more expensive as the insurance company is at a greater risk should a loss occur; however, should a fire actually occur it is priceless.

Costs of Fire Insurance

You’ll find that the costs of fire insurance are going to vary widely. There are some proactive things that you can do in order to decrease the premium amount you’ll pay on your fire insurance though. Such things as:

• Fire alarms
• Sprinkler system
• Any other safety measures

You might also find that some insurance companies will actually require such things in order to obtain the coverage.

Final Thoughts

When you’re making your purchase for fire insurance you should be aware that there are some types of fires that will not be covered under your policy.

For example, if there is a fire that is caused by an earthquake it could be excluded from a fire insurance policy as well as a fire that is considered an Act of God.

You should make sure that you read all of the terms of your policy very carefully including exclusions. If you aren’t sure of something or don’t find it clear ask questions or ask for clarification, that’s what your insurance agent is for. If the policy doesn’t meet your needs than you need to renegotiate it until you are satisfied or look to another insurance company.