While fire insurance is always relevant in Southern California, it has become increasingly more relevant in light of the recent fires that have ravaged California. In short, fire insurance is a subtype of property insurance that covers losses and damage caused by fire. Buying fire insurance as an additional layer of protection to homeowner’s or property insurance is important because it covers the cost of reconstruction, repair, and replacement of property, in addition to the limit of the underlying homeowner’s insurance policy.
A fire insurance policy includes payments for additional living expenses, or loss of use, as a result of unlivable conditions as well as harm to nearby structures and personal property. Further, fire insurance provides extra protection against water or smoke damage, as a result of a fire, and is regularly purchased for one-year increments.
Fire insurance also covers damage from fires that one would not generally think of as “fire” damage; electricity, gas explosions, and evening lightning or other natural disasters. Most policies, regardless of the coverage limit, cover fire damage regardless of where the fire originated, and will either provide insured with replacement cots damage measure or an actual cash value measure as a basis for how much money the policy will pay out.
When the home is determined to be a total loss, the fire policy may reimburse the owner for the current market value of the house. Typically, the insurance company will compare the fair market value of lost possessions with a cap on the limit based on the value of the home. At the Chernov Team, we understand the importance of additional protections in the form of insurance policies, and we strongly urge our clients to obtain all relevant insurance in order to protect what matters to them.