Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Homeowners insurance protects a home and personal possessions. Fire insurance is a type of homeowners insurance that protects against losses from a fire. To help you better understand fire insurance, let's take a look at what it covers and how it works.
Fire insurance is a type of homeowners insurance. It protects against damage resulting from a fire. It covers a policyholder's dwelling. It also covers outbuildings on the property and losses to personal possessions.
Standard types of homeowners insurance policies often include fire insurance. For most people, this is good enough. But some homeowners need to buy standalone fire insurance coverage. That could be necessary if an insurer excludes protection from wildfires.
Does homeowners insurance cover fire? Generally, the answer is yes.
Some homeowners insurance policies, called named peril policies, protect against only specific hazards. Fire is almost always a named peril. All-risk policies are an alternative. They protect against hazards unless they're excluded. All-risk policies also cover fire damage.
Also, fire insurance coverage enables smoke damage insurance claims. So, property and personal possessions are covered whether burning or smoke caused the damage.
Fire damage is typically covered even when the underlying cause of the fire is excluded. For example, if a homeowner doesn't have earthquake coverage but an earthquake causes a fire, home insurance would still cover for the fire damage.
A homeowners insurance policy protects against many losses resulting from fire. This can include:
Fire insurance typically excludes fires that are intentionally set. Many policies also exclude fires resulting from an act of war.
In certain areas, the risk of a fire is very high. So there may be a different answer to the question, "Does homeowners insurance cover wildfires?" In high-risk areas, such as in many parts of California, insurers expressly preclude protection against wildfire damage.
Homeowners should read their policies to determine the extent of fire insurance coverage. If a policy excludes fire insurance, the property owner should buy separate coverage. This is especially important when looking for fire insurance coverage in California where wildfire exclusions are prevalent.
For any homeowner asking, "How much insurance do I need?" it's important to have an insurance policy that covers the property, outbuildings, personal possessions, and additional living expenses in case of damage to or destruction of the building.
Does renters insurance cover fire? This is a common question asked by people who don't own their homes.
The good news is, renters insurance includes fire insurance coverage. Most policies provide protection for personal property that's damaged or destroyed by fire. However, some renters policies may exclude fire insurance coverage in high-risk areas. For example, it may be necessary to buy separate wildfire insurance policies in California.
It often makes sense to purchase a separate fire insurance policy if standard insurance policies exclude fire insurance. This can happen to property owners in high-risk areas.
In some cases, homeowners prefer a standalone fire insurance policy rather than full coverage home insurance. A fire policy can be less expensive than named peril or all-risk insurance. However, it would protect homeowners only from fire damage and not other types of damage.
This can come in handy if it is difficult or expensive to buy standard insurance. For example, property owners looking for insurance for vacant houses may have trouble getting all-risk or named peril coverage.
High-risk fire insurance can provide coverage to people in areas where standard homeowners policies exclude fires. This could happen in wildfire areas. It could also occur in other situations where there is a high risk of fire. Examples include when a home is located very far from a fire hydrant or fire station.
Some insurance companies include fire insurance coverage in California. However, many insurers exclude coverage for wildfires in high-risk areas.
California residents need to read their policies carefully to understand if they have coverage. And they should shop around for affordable standalone fire protection if coverage is excluded in a standard homeowners policy.
In some cases, homeowners cannot purchase fire insurance coverage from a private insurer. This can happen when the risk of fire is too great. The FAIR Plan is available in those circumstances. This is a state-mandated insurance plan offering coverage for properties traditional insurers won't protect.
FAIR coverage can be more restrictive in terms of coverage. This is typically a last resort option when other coverage is not available.
Fire insurance coverage is generally available as part of a home insurance policy. However, some home insurers exclude fire coverage. This can happen to homeowners in high-risk areas. Homeowners can buy separate fire coverage if their standard policy excludes coverage. Standalone policies can also be purchased by people who want more protection than a typical homeowners policy offers.
Fire insurance coverage pays to repair or rebuild a home. It also pays to repair or rebuild other structures on the property that are damaged by fire. And it pays to repair or replace personal belongings. It can also cover additional living expenses while a home is being rebuilt or repaired after a fire.
For policyholders with replacement value coverage, homeowners fire insurance coverage pays to rebuild the home as it stood. For policyholders with market value coverage, fire insurance only pays the current market value of the destroyed home. Fire coverage also pays to replace or repair personal possessions damaged by fire. It provides this coverage if the policyholder had personal property insurance.
Fire is covered under renters insurance in most cases. Some policies may exclude fire coverage in high-risk areas.
Homeowners insurance typically includes hazard insurance. Policies protect against either named perils or all risks except those that are excluded. In some cases, homeowners may wish to purchase additional coverage for excluded hazards.
For example, standard home insurance may exclude fire insurance coverage in high-risk areas. In that case, purchasing additional fire insurance as a standalone policy might make sense.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team. The Motley Fool has a Disclosure Policy. The Author and/or The Motley Fool may have an interest in companies mentioned.