Dangerous Loopholes In Home Fire Insurance Coverage Policies

If you're like most homeowners, you have standard homeowners insurance that acts as home fire insurance. Many times the insurance company will use the exclusions or loopholes in your insurance policy contract to avoid paying claims. Therefore, you should always review your policy contract very carefully, and make sure that you understand any exclusion fully.

Homeowners Fire Insurance Exclusions

Many insurance companies follow the concept of fire damage to the letter; therefore, some insurance companies will try to escape liability when the damage was not actually caused by the flames of the fire itself. For example, you if you have a home fire and items are heavily damaged by smoke and are rendered unusable, some insurance companies will not pay you to replace the damaged items - because the items were not damaged by the flames of the fire, but the smoke.

In fact, in recent years many insurance companies have escaped liability when people die in home or business fires, because they died of smoke inhalation and were not burned alive by the flames. Although this may be regarded as highly unethical, there are insurance companies that interpret their policies in this way.

Another common exclusion or loophole in some home insurance policies is damage caused by water. For example, if your home is on fire, and the fire company comes to put out the fire, your home insurance policy may exclude, or not pay for damage that was caused by the firefighters putting out the fire with water cannons. Therefore, you should always make sure that your policy covers damages caused not only by the flames of the fire, but by smoke and water damage as well.

Common Fire Insurance Policy Limitations

Besides the exclusions and loopholes that may actually allow the insurance company not to pay at all, many insurance policies have restrictions on what will and what will not be covered during the fire. For example if you live in historic home or otherwise older home that has very old or antique types of architecture and hand crafted items in on the house, many insurance companies will not pay to have expensive moldings, trim and other custom crafted items replaced. Rather, they will pay to have simple prefabricated or commonly made ornaments, fixtures or moldings installed. So, you should always check your policy to make sure that the coverage will cover your home as it was before any fire potential damage.

There are many potential loopholes in the exclusions of homeowner’s insurance policies that may allow an insurance company to escape liability for payment; therefore, it is your responsibility to make sure that these types of common loopholes in exclusions are not in your insurance policy. Many times, you can negotiate the contents of the policy itself with the insurer. If you cannot, choose an insurance company that provides adequate coverage and specifies in their policy contract more reasonable types of events and damage that will actually be covered.


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