Fire insurance is insurance that is used to cover damage to a property caused by fire. It is a specialised form of insurance that goes beyond property insurance. This type of cover is designed to cover the cost of replacement, reconstruction or repair beyond what is covered by the property insurance policy.
Why would you need fire insurance?
If you own a home that is in a place that is prone to wild fires, it would be wise to get fire insurance. Not all standard home insurance policies cover damage caused by fire, so you need to be prudent in this regard. Some standard property insurance policies include fire coverage, while in other cases it may need to be purchased separately.
More about fire insurance:
This form of insurance may be less expensive than flood or earthquake insurance.
Some type of fires may not be covered. It’s important that you make sure that you understand the terms of the insurance policy and the extent of cover.
Installation of fire alarms, sprinkler systems and other safety measures can decrease the cost of the policy. The lower the risk you pose to the insurance company the lower the premium will be.
Depending on the type of insurance policy you have, the insurance provider may pay out the actual value of the property after the fire or it may pay out the replacement value.
Fire insurance policies may be extended further (by paying additional premiums) to include collateral damages or losses such as loss of income.
Depending on the terms of the policy, the contents and structure may be covered in the event of a fire. Best practice would be to document the property (by making notes or by taking photographs) and its related contents to make sure that you have sufficient cover for your needs.