Fires continue to be one of the most common incidents in the United States. Local fire departments have responded to 1.4 million fire grounds. A further breakdown will reveal that a fire breaks out somewhere in the US every 89 seconds. In other words, an estimated 970 fires occur every 24 hours.
In connection, the after-effects of fires are often magnanimous. The latest report from NFPA shows that the 28 recorded large-loss fires in 2020 resulted in the loss or destruction of properties worth $8.1 billion. In connection, fire incidents in 2020 contributed to 3,500 deaths and 15,200 injured individuals.
As a homeowner or businessman in the US, an easy and effective way for you to have protection against fire breakouts is through wildfire and fire insurance. Through this guide, know what commercial or home fire insurance policy is, how it works, how much premiums cost, and more.
Fire insurance is a type of an insurance policy wherein a policyholder (you) agrees to pay a specified amount of premiums to the carrier (insurance company). In exchange for the money received, the carrier is obligated to reimburse losses should the policyholder’s property be damaged or destroyed by a fire. Fire insurance can be classified as commercial or residential.
Note that the term “fire” as used in the language of fire insurance doesn’t pertain to fires used for cooking, burning materials, or any other deliberate means. Fire in the language of the policy pertains to a flame produced NON DELIBERATELY through ignition, combustion, or smoke.
Also for clarity purposes, wildfire insurance is a specialized form of fire insurance. Therefore, it is still fire insurance in the literal sense.
In 1666, the City of London burned from September 2nd to September 6th. Coined by historians as the “Great Fire of London, this event burned 13,000 houses, 90 churches, and numerous public buildings. It’s estimated that 100,000 were left homeless and property damage is tallied at £7.5 billion ($8.9 billion)
The Great Fire left many impoverished. Also, the rental system was changed wherein tenants are liable for the damage caused by a fire to their landlord’s property. As a result of this, people became wary of the losses if another equally catastrophic event occurred.
To address the growing concern, the Insurance Office for Houses was established in London in 1681 by Nicholas Barbon just next to the office of the Royal Exchange. The fire insurance policy the Insurance Office for Houses underwrote insured 5,000 homes. Soon after, other pioneering insurance companies were established such as Hand in Hand Fire and Life Insurance Company, The Sun Fire Insurance Office, and Westminster.
The establishment of fire insurance companies in London led to the emergence of fire insurance companies in the US. This is because the first American carriers copied how British carriers designed their fire insurance policies. In the USA, the first fire insurance company was established by Charleston residents in 1735. This stopped providing services in 1741 and was replaced by Benjamin Franklin’s Philadelphia Contributionship for the Insurance of Houses from Loss by Fire.
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A home or commercial fire insurance policy is a legal contract between the policyholder and the carrier. It will not apply if none of the parties provide an express consent or agreement to the terms of the policy. Any fire insurance policy can be void, nullified, or voidable if it doesn’t have the elements of a valid contract namely:
Offer
Consideration
Acceptance
Mutuality
The policyholder (you) needs to have an insurable property to apply for fire insurance. Such insurable property can be your own possession or someone’s possession only entrusted to you through a binding agreement. In line with this, fire insurance isn’t available to persons not owning a property or doesn’t have custody over someone’s property.
The policyholder, upon agreeing to the terms, must provide a monthly or annual payment to the insurance company underwriting the fire insurance policy. In insurance lingo, this is called a premium. Premiums are calculated based on the value of the covered property, its structure, its location, and how it’s used.
In exchange for the premiums paid, a fire insurance policy will recoup the losses of the policyholder should his or her property becomes damaged or destroyed because of a fire. This is done by providing cash equal to the depreciated or non-depreciated value of the covered property.
The policyholder needs to file a claim in order to use his or her fire insurance policy. This means providing a letter telling that a covered peril has happened and complying with the requirements of the insurance company for the claim to be approved.
Fire insurance policies underwritten by different carriers vary in features. Nonetheless, expect all to provide coverage for the following perils:
Fires or wildfires resulting from ignition, combustion, or smoke are the primary perils covered by a fire insurance policy. Fires resulting from deliberate actions aren't a covered peril. The same is also true if the covered property was burned by the order of a legal authority.
Fire insurance also provides coverage if your property burned due to lightning. It's common knowledge that lightning can burn or ignite the object it hits. This is why it’s a covered peril in fire insurance policies.
Fire insurance policies cover explosions caused by electronic devices or specific flammable objects. Explosions due to the sudden increase of a covered property’s internal temperature is also covered. Note that fire insurance doesn’t kick in if an explosion is caused by a boiler, heater, or any other similar devices.
Fire insurance will recoup losses if your property is destroyed by a plane, helicopter, or any other aerial vehicle. Any damage or loss caused by the falling attachments or loads of an aircraft to your property will be catered too.
Fire insurance policies will take care of the damage or loss of your property due to riots and vandalism. Arson can be covered or not covered depending on the insurance company you decide to work with.
Fire insurance will provide coverage if your property becomes lost or destroyed due to extreme weather. Particularly, what’s covered are typhoons, storms, floods, earthquakes, tempests, cyclones, hurricanes, and tornadoes.
Fire insurance covers impact damage. In practice, it will recoup financial losses if a vehicle or any other machine crashes into your property. Because of this, fire insurance is very useful for commercial buildings and houses near public roads
Fire insurance will cover costs if your property is hit by a missile or any other projectile. However, coverage only applies if the missile or projectile found its way to your property due to testing. Fire insurance won’t help if your property was targeted deliberately.
Fire insurance, in its most basic form, will only protect your property against fires, wildfires, and lightning. To cover other perils we mentioned above, you need to add optional coverages or introduce endorsements to your fire insurance policy.
Here is a comprehensive list of some of the costs covered by a standard fire insurance policy.
First and foremost, your insurance is designed to cover the loss of your home or other insured buildings. For many people, their most valuable possession is their house.
However, fire insurance will also cover personal items such as furniture, electronics, collectibles, and more. As long as you claim these items on your policy, then they should all be covered when it comes time to collect your payout.
Just keep in mind that as you add new items to your house, you may need to call your insurance provider and provide them with details so that they have a record of the item being in your house.
Sometimes a fire may not destroy the entire building and will just be contained to a certain room. However, the smoke damage caused by the fire can spread into the walls and ceilings, compromising the integrity of the structure. Fire insurance coverage typically covers any cleaning and repair expenses due to smoke-related damage.
If you (the policyholder) are injured while on the insured property, then you'll be eligible for a payout for personal damages and to help pay any medical bills.
After losing everything, most people have to rent a hotel or second house. They also may need to pay extra money to eat out. Thankfully, your insurance company should pay for all of these related costs.
There are a couple of things that are excluded from the insurance policies.
It's not uncommon to lose your car or motorcycle during a house fire if it was in the yard or parked in the garage. However, these are usually not covered. You'll have to seek compensation for your vehicles through your auto insurance policy.
If the property was left vacant for over a month, many standard insurance policies will refuse to cover the costs. They'll try to say that the fire was caused by negligence that could have been prevented if the owner would have been there.
As stated earlier, you have to file a claim to use your fire insurance. Make the first move upon experiencing property damage or loss due to a covered peril. Don’t expect the insurance company to ask if you want to use your fire insurance before it expires. That said, here are the steps in filing a fire insurance claim.
Immediately inform the insurance company that you experienced a covered peril and tell them that you want to use your fire insurance policy. You can do this by calling or sending an email to the carrier’s claims department.
If your insurance company only works with agents, then reporting a claim is done by getting in touch with the insurance agent or broker who sold the fire insurance policy to you.
Upon knowing that you experienced a covered peril, the insurance company will then send a claim form to you via email, fax, or mail. But if you’re working with an online insurance company, you will have to fill up a claim form on a website. Understand that it might take a few days for the insurance company to review your claim form. And so, expect to do some waiting.
Upon reviewing your claim form, the insurance company will get back and request documents to be submitted. These can be pictures, affidavits, or any other documents that will prove you have experienced a loss due to a covered peril.
The insurance company might do another round of verification by sending an insurance adjuster to do some survey or evaluation. Expect this to happen if the covered peril resulted in major losses on your part and the amount you need from your fire insurance policy is hefty.
The final step is claim settlement. This is when the insurance company agrees or disagrees on you wanting to use the funds of your fire insurance policy. Note that you can dispute in a court of law if your claim is denied. You can also report the matter to the insurance department of your state.
Although your insurance adjuster may seem a bit cold and uncaring, that's their job so don't let it get to you. Here are a few quick tips to help you deal with an insurance adjuster in the event that you suffer a house fire.
Take a detailed inventory of all items lost
State the nature of your loss clearly
Don’t get worked up and stay calm and collected even if experiencing a lot of back and forth with the insurance adjuster
Ask for a review of the terms of your fire insurance policy and reference that on your fine print
Keep receipts for every purchase or cost
Be patient. You will get your money
The additional premium charges for your fire insurance property coverage vary, depending on your zip code and other factors. The average monthly premium charge is around $120 a month or $1,440 per year. This is closely correlated with the average damage claim amount, which is around $80,000 per claim.
Additionally, here are the rates of the best fire insurance companies.
| Cost per Month | Cost per Year | Best for | |
|---|---|---|---|
| Lemonade | $98 | $1,176 | Residential fire insurance |
| Shelter | $115 | $1,380 | Commercial fire insurance |
| Progressive | $121 | $1,452 | Fire insurance with transparent rates |
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Buying a policy is easier and safer if you know the trusted carriers. Read the reviews below to know the pros, cons, and monthly premium rates of the best fire insurance companies.
Online quotes
Fast to handle claims
Get insured without talking to an agent
Lemonade provides residential fire insurance. This is included in the company’s homeowner's insurance policy. Choose Lemonade because it offers online quotes within minutes. Also, this insurance company efficiently handles claims and never leaves you in the dark about the particulars of your coverage.
Best for: Residential fire insurance
Average cost: $98 per month
Our rating: 10/10
Work closely with agents
You can choose which agent to work with
Commercial fire insurance covers a lot of perils
Only provides coverage in 15 selected states
Shelter’s fire insurance for commercial property covers 12 perils including those not commonly included by other carriers such as volcanic eruption and sinkhole collapse. You can also introduce an endorsement to your fire insurance policy to be protected against water damage, building collapse, and ice or snow. Shelter’s commercial fire insurance is an actual cash value coverage but you can decide to get a replacement cost coverage for specific perils.
Best for: Commercial fire insurance
Average cost: $115 per month
Our rating: 9/10
Online quotes
Transparent pricing
File a claim online
Not accredited by BBB
Progressive’s fire insurance is included in its homeowner’s policy. You can obtain a free quote from this company showing what’s covered, the amount of coverage to be received, and the monthly premiums.
Best for: Fire insurance with transparent rates
Average cost: $121 per month
Our rating: 8/10
Please follow these steps to protect your home or your property from fire:
Make sure the 100 to 200 feet surrounding your house are clear of debris and flammable materials or objects to create a 'safe zone'
Block any exterior vent and rooftop openings, even your doggy door, with hardware to prevent embers from getting out and putting your whole interior on fire!
Fireproof your roof by making sure it is not made out of flammable material (asphalt shingle, metal, tile or slate roof) and if it is - spray it with fire retardant or install fire sprinklers
Protect the 5 feet surrounding your house: Make sure there are no propane tanks and firewood stacks which can become a serious threat in case a fire breaks out, maintain your lawn and clean out dead vegetation - any flammable material must be moved away for your own good!
Make sure you have fire extinguishers, alarm systems, and sprinklers in easily accessible places for emergencies
Always use fire-resistant material when building or renovating your home
If you are renting, then your landlord is required to have property insurance. In the event of a fire, your renter's insurance will cover any of your personal losses.
Although many homeowners insurance policies do include a small amount of fire damage coverage, this is usually designed for small accidents, not full-scale disasters.
If you want to make sure that your belongings and home are fully covered after a fire, then you'll need to have a proper fire insurance policy. This is usually considered an "add-on " under your existing insurance plan.
Most insurance companies bundle fire insurance with general home insurance, especially if you live in wildfire prone area.
Debbie Gibbs Insuranker
Policy Type: Home Insurance
Company name: Berkshire Hathaway GUARD Insurance Companies
They deserve no stars. I caution everyone to read their policy. They added a page in the back that we did not discuss that changed my deductible from 2% of the damages to 2% of my coverage amount. Meaning when my roof was damaged in a tornado they made my deductible $8100 instead 1000. They are despicable and I am suing.
Worst company ever. Bad customer service. I canceled my homeowners insurance policy and they kept righting new ones. They never canceled my insurance with my mortgage company and they kept taking money. I had to fight this for a year and still waiting for a refund. They are thieves and criminals. Stay away!!!
Carolyn Flanagan Insuranker
Policy Type: Home Insurance
Company name: Berkshire Hathaway GUARD Insurance Companies
Hands down this company and the staff has been a God send.. especially Patrick Nelson . If I could hug him I would give him the biggest bear hug. We had an electrical fire in our kitchen . I was so scared . For my kids and dogs safety .. the smell was horrible , the police and fire came to my rescue . But the real hero is Patrick NElson he’s been a driving force with helping my family along . He’s has so much patience , and he’s a great listener . I’m only at the first stances of this process but I know I won’t be disappointed .
Carolyn Flanagan Insuranker
Policy Type: Home Insurance
Company name: Berkshire Hathaway GUARD Insurance Companies
Hands down this company and the staff has been a God send.. especially Patrick Nelson . If I could hug him I would give him the biggest bear hug. We had an electrical fire in our kitchen . I was so scared . For my kids and dogs safety .. the smell was horrible , the police and fire came to my rescue . But the real hero is Patrick NElson he’s been a driving force with helping my family along . He’s has so much patience , and he’s a great listener . I’m only at the first stances of this process but I know I won’t be disappointed .
This company is the WORST! I required my tenants to buy renter insurance through them when I bought a little rental house near my vacation home. I A life policy thru them. Their app is okay when you’re BUYING OR PAYING for a policy but that seems to be where it ends. Lucky I did have these tenants buy it because on weds the home burned to the ground. They have absolutely nothing and are homeless. My insurance company farmers responded right away and are all over it after filing a claim a day later; but lemonade has not reached out to the now homeless tenants who had borrowed money to pay their policy in full a few months back. I (the landlord) after losing a property I just bought have had to put the tenants up in seedy motels which are $200 a nite min in the boondocks. We reached out to lemonade pleading for help after figuring that we would get a call on Friday before the new years weekend offering help since they have 60k in both temp housing and personal property coverage. But we have gotten no calls or email. NOTHING. I called today the 31st on behalf of the tenants (fire was 27th and claim the 28th) and was told it was sent to an adjuster named Tobias on the 28th. Tobias however seems to have no email or phone number we can call; and the lady at “emergency services” said they can’t do anything to help these tenants until after the long weekend. That will be a full week since the fire and 6 days since they filed a claim Asking for help. And that assumes that this person actually calls back. Apparently there is nothing they can or will do to put these tenants up who have no clothes vehicle or housing and lost most of their cash and all of their valuables in the fire. Of course I also was waiting on my late rent for December which of course now the tenants don’t have, so I’m already out $3600 in lost rents and have had to put tenants up to $400 a night (they are a family with kids so need two Rooms) at $2400 in cost because lemonade won’t respond. I had to pay for clothing; and the Red Cross thankfully gave them a few hundred bucks too. It’s 20 degrees with snow on the ground in the Northern CA town and this is nuts. I’m a real estate broker who’s sold over 600 homes in the last 27 years and I’ve owned over 30 (wish I still had them all; I’ve only got my house, vacation home, this rental and a lot I’m about to close on and this is eating into my money allocated for that. LEMONADE U SUCK. Folks, claims is where rubber meets the road and unless they seriously come through and cut a check for the policy limits they get a trash rating from me with every client for my next 40 years In real estate. Even if they did that it still does not excuse leaving a family with young children homeless and destitute when any other insurance I’ve dealt with will reach out to the clients the day they get the claim and see what’s needed. This company not only failed to do that; but they don’t have a number or email for the adjuster and no one can do anything to assist their clients apparently on holidays or weekends. For an insurance company to operate that way is insane. Their rates and coverage may be good looking, but if they screw you when it comes time for them to pay out it’s totally useless. At this point if the tenants don’t file a claim against this company and a complaint to the insurance commissioner then I will because it’s deserved. Seeing all these high reviews makes me think that these are folks who think they have quality coverage like my tenants assumed (and like I assumed on my life policy which I’ll be cancelling) when they have coverage from a robot, answering machine, an app, and an “emergency team” who’s only Response is “we will call you on the next workday maybe and call 911 if there is a real issue”. I predict they go BK within 5 years and there won’t be any love lost. Lemonade; get your act together, I should Not be doing your job when I’ve taken a loss and am having issues myself…totally wrong and unprofessional.
Not all those who wander are lost.
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