One of the most significant factors that can ruin your home is fire, and no one is clairvoyant enough to predict its occurrence. That is why you will need a comprehensive insurance policy to protect your home from damages caused by fire. However, the homeowners’ insurance policy offers limited coverage that may not cover the entire expenses you may incur if your property is utterly damaged due to a fire outbreak.
You can forestall the limited coverage of your property insurance policy, that does not guarantee you of covering the entire expenses you incur from an utterly damaged home due to a fire outbreak, by purchasing an additional fire coverage that will protect your home from the cost of replacement and reconstruction of your home. From the preliminary discussion, one may define fire insurance as the type of insurance that provides coverage for the damage and loss of properties caused by a fire outbreak.
There are, however, two different conditions that will not be covered by your homeowners or rental insurance policy, and they include arsons and fire in a vacant room. If your home has not been occupied for thirty consecutive days, which means it has been vacant. If there is a fire outbreak in that vacant home, your homeowners’ insurance policy will not cover the damage and loss of properties the fire might cause. If homeowners intentionally set their homes on fire to obtain insurance money, it is called insurance fraud (arson), which will not be covered by your home insurance policy.
We now know that homeowners insurance policies also offer extra coverage for basic fire and lightning in addition to the protection of your home from theft, vandalism, and liability. There are, however, three types of homeowners insurance coverage based on the property they cover, and they include:
Basic form fire insurance:-Basic form fire insurance policy offer you coverage for several structures and items vulnerable to fire damage in your property. They include the entire structure of your home, other structures on your property (such as garage and fence), personal properties (such as pieces of furniture, precious items like jewelry, and collectibles). They also function as loss-of-use coverage for clothing, hotel, meals, laundry services, and several other living expenses you may incur if your home is utterly damaged and you can not live in your home during the period of reconstruction.
Broad form fire insurance: Broad form fire insurance policy offer coverage for fire damages similar to a basic form fire insurance policy, coupled with additional coverage for several other perils to your property, such as burglaries damage, accidental water damage, natural disasters, such as snow and ice.
Special form fire insurance: Special form fire insurance policy provides a diverse coverage that includes basic and broad form fire insurance policies, coupled with other perils, such as fire and lightning provisions. Irrespective of how diverse the special form of fire insurance policy coverage may be, they do not cover damages to your property that results from earthquakes, floods, war, nuclear hazards, and power surge.
You will be required to purchase homeowners insurance policy before you can purchase a fire insurance policy. The cost of homeowners insurance policy premiums—that is, the payment you will make routinely to maintain the insurance, ranges from about $606 to $2,312 per annum. Still, the standard cost of a homeowners insurance policy is about $1,000 per annum, nationwide.
The cost is not constant but fluctuates due to several factors that may influence its stability. The factors that influence the cost of a fire insurance policy include the following:
– Dwelling coverage
– Personal property coverage
– Your deductible
Dwelling coverage: Dwelling coverage is the standard amount your insurance policy will cover if the structural integrity of your home is damaged. Suppose you increase the cost of dwelling coverage in your policy; it will result in a simultaneous increase in your homeowners’ insurance rate to benefit from total coverage. What this means is, if your home is worth $400,000 and your home insurance policy coverage is limited to not more than $150,000, you will need to increase the amount of dwelling coverage, which will result in a higher cost of the premium.
Location: The location of your home also plays a significant role in the alteration of the cost of a fire insurance policy. The state or city your home is mounted may influence the cost of a fire insurance policy. If you stay in Oregon or Florida, you will be required to pay about $806 and $2,312, respectively.
Personal property coverage: If the value of your personal belongings, such as furniture, electronics, etc., are more than the personal property coverage of your fire insurance policy, you will have to increase it by paying more for the premium.
Discount: Fire insurance providers may offer you the benefit of paying less for your premiums if you bundle your home and auto policy together and if your home possesses protective devices to forestall and alleviate fire damages, such as fire extinguishers, sprinkler system, deadbolt, and smoke alarms.
Deductible: Deductible is the amount of money you are expected to pay for your damages before your insurance covers the rest. Therefore an increase in your deductible will lower your fire insurance policy rate.
There are a plethora of fire insurance policies in the market, which makes it a bit challenging to pick the right one. Since homeowners insurance policies usually offer coverage for fire and lightning damages, the primary way of choosing a better fire insurance policy results from choosing the best homeowners insurance policy. In addition to this, you will be able to know if the homeowners’ insurance policy you choose will provide enough coverage by comparing your home’s value with their coverage limit.
Studies and research about the best fire insurance policy that was based on a few factors, such as convenient claim service, comprehensive home insurance, and multi-product savings, include the following:
– Amica Mutual
– State Farm