Fire Insurance Essentials to Protect Your Home

Having home fire insurance protects you and your family against the loss associated with damage to your home caused by fire. The fire insurance protection, which can be purchased on its own or in connection with a homeowner’s policy, restores the value of loss items that are damaged or destroyed. Having this protection is important for you and should be a part of your overall homeowner’s protection.

Where You Live

Where you live will be an important factor for an insurance company when issuing a fire insurance policy. The likelihood of a fire destroying your property is greater in certain parts of the country than in others. This likelihood will result in a wide difference between pricing for fire insurance protection.

For example, the recent California wildfires makes obtaining fire insurance protection less affordable when compared to a state like Alaska, which does not have as many fires. Regional factors determine rates.

More locally, if you live in a neighborhood that is more susceptible to house fires, whether through acts of arson or accident, your insurance company must take that into account as well.

Occurrence of Fire
The frequency of fire occurring in your area factors into how the coverage will be priced and what you will receive as protection. The more fires that occur, the more expensive and lease beneficial the policy will be. This is because the insurance company has to account for the possibility of risk of fire occurring.

These risks can be due to some hazard or chance of risk:

  • Physical hazard or based on some environmental factor, like storing gasoline cans in the garage.
  • Moral hazard, which is arson or acts designed to start a fire.
  • Morale hazards that are created through indifference.

Types of Coverage
The types of fire insurance can be limited to certain types of fires, such as house fires that are not due to a natural cause. The more things that are covered under the policy, the more expensive the coverage will be.

Fire Prevention Steps

Many fire insurance policies offer discounts to homeowner’s who help manage their risk from fire by taking certain precautionary steps. Things like installing smoke detectors throughout the home, having a fire escape plan on file, installing flame retardant installation in attics and crawl spaces, all contribute to reducing the risk of damage or destruction occurring from fire.

Fire insurance should restore you to your original value, in the event of fire. The risk of fire occurring to your home, based on where you live or the likelihood (probability) of fire determines the amount of premium or the cost you pay for the insurance. There are also other types of coverages and fire prevention measures that can reduce the cost of insurance. 

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