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Homeowners Insurance and Fire: Filing Claims After a Total Loss

By Gary Bangstad on March 27th, 2010
Homeowners Insurance

You've done all you can to protect your home from a fire--you've installed smoke detectors and you have fire extinguishers in key locations throughout your home. But in the event of a fire, are you prepared to recover your financial losses? You have homeowners insurance, but are you covered if there is a small kitchen fire or you suffer a total loss?

Fires Are Covered Under Common Homeowners Insurance Policies

Homeowners insurance typically covers damage to your home caused by fire, wind, and lightning. In the case of fire damage, your home insurance policy normally covers both total losses and partial losses, such as the destruction of your roof or smoke damage.

According to the Insurance Information Institute (III), the most common home insurance policy provides coverage for the following:

  • Your house, furniture, and personal belongings (up to your policy limits)
  • Your liability to others (injury on your property)
  • Additional living expenses you may incur if your home is severely damaged
  • Other structures such as a garage or shed
  • Losses due to looting or vandalism

It is important to read your insurance policy because coverage and exclusions (flooding, earthquakes, and sewer backups) vary from policy to policy. In order to understand what perils your home insurance policy covers or excludes, you should discuss your coverage carefully with your insurance agent.

Be Prepared by Taking Inventory

You should be prepared to make a claim by taking inventory of your belongings and knowing the replacement value of your personal property.

Inventories can be time consuming, but completing this task may pay off should disaster strike. Your homeowners insurance covers the loss of your furniture and personal belongings. Plan ahead by documenting what you own, including the price of your belongings and the date of purchase. Consider making a photographic record as well, and store all documentation in a fire-proof box, or better yet, a safety deposit box.

Being prepared also means doing the math so that you know the replacement value of your home, which may be your most important asset. Here are steps that may help you determine whether or not you are carrying enough homeowners insurance:

  1. Get an estimate of the current new construction costs, per square foot, in your area
  2. Determine the total square footage of your home, including non-living spaces such as your garage
  3. Multiply the square footage of your property with the current construction costs (per square foot) in your area
  4. Check your figure against the coverage in your policy

If your number is fairly close to your policy's limit, you might be adequately covered. If it isn't, have a discussion with your agent about replacement costs. You want to be properly insured in the event of a fire.

What Should You Do If You Experience a Total Loss of Your Home Due to Fire?

Your emotions may be in turmoil following a fire, but recovering your loss is a business negotiation. Remember that the adjuster is working for the insurance company--not for you. You may even want to consider hiring your own adjuster to represent your needs.

In any case, the more you know and the better you document your loss, the more you could recover when settling your home insurance claim.

Here are several steps to take should you experience a fire:

  • Call your insurance agent immediately, as there is a time limit when filing claims
  • Record the damage with pictures or video, but leave the site intact for inspection by the adjuster
  • Make a detailed list, if you don't already have one, of destroyed possessions. Consider your losses room by room, perhaps enlisting the help of family or friends in remembering the contents of your home
  • Keep a record of all expenses following the fire, including living expenses
  • Be sure to provide your insurance company everything that they request
  • Don't rush the process. Give yourself time to gather information and document your findings, and be persistent in communicating with the insurance company--don't be pressured to settle

More information is available from the National Insurance Consumer Helpline: call 1-800-942-4242 and ask for their free brochure and other materials.

Above all, be sure to start out by buying a good policy. Compare home insurance quotes from multiple insurance companies and choose the best policy for your needs.

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