Fire insurance protects homes against the threat of fire -- be that fire caused by nature or arson. It, however, doesn't prevent all of the risks of fire, so it is important to know what kind of protection one can get from fire insurance.
Fire Insurance Coverage
In general, basic fire insurance coverage only protects the value of the physical house itself. It usually does not protect against any of the following: loss of human life due to fire, loss of pets due to fire, medical expenses accrued due to injuries sustained in fire, damage to the landscape, or damage to one's personal belongings inside the house, garages and gazebos outside the house, and living expenses to move somewhere else until the house is repaired. An extended property insurance package can cover these things, but in general, the most basic fire insurance coverage does not.
Cost of Fire Insurance
Similar to life insurance, the cost of fire insurance can depend on many different variables, including the type and breadth of coverage, the value of the home, the risk factors inherent in the home's location, the additional modes of coverage in addition to the basic policy, and what one would otherwise do with the money spent on the cost of fire insurance -- such as invest it.
When to Buy Fire Insurance
Obviously, there are some areas that are more prone to wildfires than others, but a fire can happen to anyone, so there is no set time as to when to buy fire insurance. Steven Shepard reveals in his book, Be Fire Safe: How to Avoid Fire, Reduce Loss, and Recover from Insurance if You Have a Fire, that his home caught fire literally days after his bank sent him a insurance cancellation letter on his fire insurance.
Fire Insurance Details
Insurance generally has its share of legal restrictions, and fire insurance details are no exception. Obviously, people will void their insurance if they set fire to their own home. Many insurance companies will also void the insurance policy if their investigation shows that the fire was a result of negligence. In addition, the types of coverage generally limit certain kinds of damage. For example, insuring belongings generally has a certain maximum value. If one has a lot of valuables in their home that they wish to insure, it may be necessary to take out additional policies. One should always read the fire insurance details before purchasing a policy.
Although certain people are more at risk than others, every homeowner has some risk of a fire, which means that fire insurance, in addition to other kinds of property insurance, may be needed if one wants to be completely financially protected in the event of an emergency. There are many different kinds of policies and levels of protection, so the cost of fire insurance policies greatly varies.
Sources:
Steven Shepard, Be Fire Safe: How to Avoid Fire, Reduce Loss, and Recover from Insurance if You Have a Fire, 2002
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