It is a very unfortunate thing for one to buy a house and then watch it burn to the ground - your life investment, the product of your life savings, a property that you might have spent a long time building, just burning down to ashes!
But you know what's more unfortunate? Not having the house covered in insurance before the sad occurrence.
For this reason, I don't think anyone would say that getting a fire insurance is a bad idea.
Therefore, in order to get a fire insurance plan for your property, it is only wise that you know about what you want to get. And that's my purpose here. To educate you on fire insurance, so that you'll be able to conveniently choose the plan that befits you and your pockets.
On this article, I'll be talking about areas under fire insurance. Basically just the basics!
Areas that I'll touch include;
• What is fire insurance?
• Things You Should Know About Fire Insurance
• Types Of Fire Insurance
• How Fire Insurance Works
• How To Get Fire Insurance
Let's learn, shall we?
WHAT IS FIRE INSURANCE?
Fire insurance, as the name implies, is a form of property insurance that covers losses and wreck due to fire. In reality, most insurance policies actually come with some kind of fire protection, but the purchase of additional and wider coverage is available to homeowners in case their property is, by chance, damaged by fire, or lost because of fire.
The purchase of additional coverage is helpful in covering the cost of repair, replacement or the reconstruction of property way above the limit that is set by the property insurance policy.
It is important to note that typical fire insurance policies exclude perils such as nuclear risks, war and other similar occurrences.
THINGS YOU SHOULD KNOW ABOUT FIRE INSURANCE
Here I would be summarizing the key things in fire insurance in case you do not want to read everything on this article.
• Fire insurance is basically property insurance, but the type that is put in place to provide additional coverage for damage or loss which happened due to a fire.
• The fire insurance policy pays the insured back on an actual cash value basis or a replacement-cost basis for damages.
• Some homeowners policies include fire coverage, but even at that, the coverage may not be wide and extensive enough.
• Fire insurance tends to be capped at a lower rate than the losses sustained, which makes it necessary most times to have a separate fire insurance policy.
• There is the inclusion of additional coverage against water or smoke damage due to a fire, in a fire insurance policy. But this benefit is usually for just a year after the policy has been purchased.
• Homeowners can renew their fire insurance policies on the verge of expiring, under the same terms as the original policy.
TYPES OF FIRE INSURANCE
The types of fire insurance plans include;
• Basic form fire insurance
• Broad form fire insurance
• Special form fire insurance
Let's discuss them briefly.
Basic Form Fire Insurance
This type of fire insurance policy covers personal property as well as items on the property.
It covers personal belongings like;
- Your home
- Structures on your property, inclusive of sheds, gardens, garages, fences and other similar property.
- Personal belongings which include collectibles, furniture, cash, computers, and even jewelry!
When purchasing the fire insurance plan and listing out belongings to be insured, the insurer will set a standard amount of benefit to be received by you.
Broad Form Fire Insurance
This type of fire insurance policy provides the same coverage as the basic form fire insurance policy, as well as coverage for all the listed perils under it. The only difference is that it has an additional coverage for other dangers to the insured's policy. Dangers such as accidental water damage, Weight of ice and snow, falling objects like tree parts, burglary damage and other similar mishap.
Special Form Fire Insurance
This type of fire insurance policy covers all perils listed under the two types of insurance policy I mentioned above.
It also includes the fire and lightning provision, and even any peril that isn't specifically excluded under the policy - that is to be named exclusions. These exclusions include; flood, earthquakes, war, power failure and nuclear hazards.
HOW FIRE INSURANCE WORKS
A fire Insurance policy covers the insured against losses or damage brought about by fire from a good number of sources.
Examples of these sources include fire outbreak due to a faulty wiring, electricity, cooking gas or working gas explosion.
Fire caused by lightning during a storm or rainfall is also covered. Even a water tank or pipe that burst may be covered.
Coverage is provided by many policies with little regard to whether the fire in question started from inside or outside the property.
However, the coverage limit is determined by the cause of the fire.
In the case of the home being in total ruins, some insurers may reimburse the insured with the home's value at that point in time.
Provision of a market value for compensation for lost possessions is made by the insurance, with the payout in total determined based on the burnt home's absolute value.
For example, if a home is insured by a policy for $350,000, the contents are, most of the time covered for 50% to 70% of the policy value at least, which means that it should be ranging from $175,000 to $245,000. Although a lot of policies limit how much payouts cover items such as jewelry, paintings and gold - all of which are luxury items.
HOW TO GET FIRE INSURANCE
Frankly speaking, in order to be able to choose the right company to purchase fire insurance from, you will have to do a little research.
Not to worry though, you have the internet at your fingertips!
Just check out some home insurance companies and compare their policies, premiums, coverage amounts, special deductions and accountability.
I believe with this, you shall get the one that is suitable for you and your pockets.
And when you're finally satisfied and want to take the huge step, you can also reach out to an insurance agent online (or offline if you know one). If it's online, they'll provide you with a number. Just call and ask more specific questions about the coverage. There shouldn't be issues if the agent is knowledgeable and understands what you want.
