As a mom, a house fire can seem unthinkable. But it can happen to you. There are thousands of residential fires every year, from brief kitchen fires (which can still be quite expensive due to smoke damage) to total losses.
Many of the causes of residential fires are also no fault of the residents, including heating equipment failures, electrical problems like poor wiring, and cooking accidents. They can happen at any time to anyone.
But that’s why you have a home insurance policy, so that you can make a fire insurance claim to cover the costs should anything happen. While you hope for the best, your home insurance policy is how you prepare for the worst.
Whether you’re making a fire insurance claim now, in the process of buying a new home or updating your policy, it’s important to understand your home insurance policy so that it protects your family from major financial loss. This is a brief guide to what’s covered by your insurance policy and how you can make sure you receive a better settlement if you ever need to make a fire insurance claim.
1) Additional Living Expenses
Your home has suffered fire and smoke damage, and your family needs to stay somewhere while you file your claim and as work is done on your home. The cost of renting another place to live is covered by the ALE section of your policy, up to a certain limit. In addition to a hotel stay and renting an apartment or condo, ALEs include storage, transportation costs, and food above and beyond your usual grocery expenditure.
2) Contents
Lost and damaged belongings are also covered by a policy. They include things like:
- Furniture;
- Media;
- Apparel;
- Dry and frozen food;
- Tools;
- Appliances;
- Electronics.
One of the most claimed household items is jewelry, as it’s often a target of theft. It’s important to note that special limits usually apply to valuables like jewelry, fine art, furs, etc. If you’re concerned about losing valuables like these, be sure to research your insurance options.
3) Structure or Dwelling
The cost of repairing your home after a fire falls under Structure or Dwelling. This only covers the cost of building materials and labor, not the market value of your home. It’s an important distinction to make, and if you want to find out if you are adequately covered, you may want to reach out to local builders to ask for cost averages per square foot in your area.
You may also not receive the full cost of replacing everything if you have Actual Cash Value coverage. Individual parts of your home can be evaluated with depreciation in mind. The older the materials, the less the insurance company may pay out to replace them.
As insurance premiums continue to rise due to the increase in natural disaster-related claims, it can be tempting to trim your coverage and save on your monthly expenses. Take a close look at home insurance quotes and what kind of coverage you can get.
If you need to make a fire insurance claim, you can wind up facing high expenses without sufficient coverage.
