After the rain comes sunshine! Summer will be here in no time, and with that, the danger of fires. Is your homeowner insurance protecting you in case of a fire? In this guest post, Fred Giron, a Property & Casualty insurance expert and dear friend to Inspired Financial, explains what is covered by your homeowner insurance after a fire loss and gives simple tips to keep track of your possessions. As with all your insurance, we hope you never need to make a claim but in case you do, it’s comforting to know that you’re protected. Read on for more details!
Long before insurance policies for your home were called “homeowner insurance,” they were called Fire Insurance policies. Fire is one of the original insured perils and continues to be of concern to all homeowners. Nowadays, in addition to fire, home insurance policies can cover theft, water damage, liability, and even earthquake. But when most people think about home insurance, they think of fire coverage. So, what is covered after a fire loss? Let’s focus on a few things besides the obvious reconstruction of the home.
Additional Living Expenses
It takes a long time to rebuild a home. Delays can happen outside the control of the homeowner and insurance company. Some variables that take time are demolition, architectural plans, engineering reviews, HOA approvals, and local permits. Where will you live during reconstruction and how will you pay for it? Additional living expenses (or sometimes called Loss of Use coverage) helps pay for these additional expenses. Luckily, this coverage is built into almost all homeowner policies. Nonetheless, it is good to know how much time limit or dollar amount this coverage affords to you.
Last year, California was hit with a lot of fires. You may know someone yourself that was forced to evacuate. In this dilemma, your home may not have caught fire but you still incurred costs due to a forced evacuation. Can your insurance company help respond? In most cases, yes. Insurance companies will help pay for Additional Living Expenses but in this scenario, it is usually limited to two weeks.
A neighboring fire generates a lot of soot and ash. The smoke can be especially destructive if it finds its way inside your home through an open window or any open vents. The soot and ash can cause irreparable damage to your personal belongings with stains, smells, and harmful pollutants.
What if your home did not catch fire but smoke damaged your house? Can your insurance company help respond in this scenario, too? Yes, homeowner policies can respond to smoke damage.
Fire Department Damage
I have walked into a home shortly after a fire. The interior soaked in water, the roof had holes in it from firefighter axes, and personal belongings broken from water pressure. At first, it seemed that the firefighters caused more damage than the fire. Of course, it could have been a lot worse. Without the firefighters help, there could have been no home for me to walk into. And yes, the damage the firefighters cause is covered by your homeowner’s policy.
Moving Your Items to Safety
You have time to evacuate and you start moving your personal belongings to a safer area. Are your personal belongings covered away from your residence? Your personal belongings are generally covered anywhere in the world (including storage lockers) but something special happens when you are moving property to protect it from further damage. For 30 days, your personal belongs are covered for any peril, even flood.
Ordinance or Law
What if only a fraction of your home was damaged by a fire, but the city forced you to rebuild the entire home to bring it up to code? This scenario is tricky. This construction is often not covered under the dwelling limit but found under a separate limit called Ordinance or Law. Most homeowner policies carry some Ordinance or Law coverage, but the limits vary widely so it is important to know what your policy covers and increase it if it is too low.
A final note: One of the simplest things you can do to make your life less stressful if you need to make a claim is to video record your possessions and home with your cell phone, then upload the file to the cloud. Insurance companies will want an inventory of your contents after a loss and the video can be a lifesaver. Don’t know how to put videos into the cloud? Send your video file to Inspired Financial and they can store it in their database for you. The important thing is to keep the video in a safe place away from your home.
Fred Giron, CPCU, AIC, is an account executive at PHD Insurance Brokers, Inc. for 7 years, in Los Alamitos. He specializes in personal line P&C products using a variety of insurance carriers. Fred has spoken on insurance at Cal State Fullerton, UC Irvine Extension, FPAOC Study Groups, and FPAOC Quarterly Meetings. He is also a member of the Orange County CPCU Society (Charted Property Casualty Underwriters) and licensed in Property & Casualty Insurance for 14 years.