If there’s a fire in your house, insurance is the last thing you should be thinking about.
To put your mind at ease, fire losses are generally covered by any home insurance policy, as long as the fire wasn’t set on purpose (arson).
When you discover a fire:
If you have any doubt about your ability to put out the fire or get out of the house:
Make it your number one priority to get yourself and your family out of the house to safety.
Don’t try to save your valuables, family pictures etc.
Only once you are safe, then call 911.
Let the fire department do their best to contain the fire.
If you have a working fire extinguisher, you know you and your family have an escape route and the fire is fairly small:
Try to put the fire out.
Make sure it’s completely out.
Call 911 to be sure.
When you and your family are safe, call your insurance company to start your claim.
Need a place to stay?
If your house burns to the ground, or if there is some question as to whether your home is safe to live in after a fire, your insurance policy will pay for alternate accommodations while the damage is repaired and/or the house is rebuilt. Your insurer should help you make arrangements. Likewise, you should get a food allowance should you need to spend more than usual for meals while you don’t have access to your kitchen. Note that there are limits to this coverage, so don’t check into a five-star hotel and start eating nothing but caviar. The accommodations and food should be equivalent to what you’re used to.
If your home is completely destroyed by fire:
If your house burns to the ground, your home insurance should pay to have it rebuilt as it was before the fire. There will be an upper dollar limit in your policy, so depending on the current price of materials and labour, you may need to make some tough choices regarding materials etc. Some insurers offer guaranteed building replacement, which means they will pay to rebuild even if the cost exceeds your limit.
In terms of your possessions, when your home is completely destroyed, your insurer is likely to write you a cheque for whatever the contents policy limit is, which is specified in your policy. They are unlikely to ask for receipts once the fire department confirms that your home is a total loss.
Did you know?
When you buy home insurance, you will choose a cash limit for your contents. This is the maximum the insurer will pay you even if all your possessions are lost. The higher the limit, the higher your premium. The recommended amount if you don’t want to price out everything you own is $7,000 per room in the house, including bathrooms and the garage. If you have valuable items like antiques, collectibles, jewellery or more than $1,000 in cash, you need to insure those things separately.
If your home is damaged by fire:
If you have a fire that causes damage to part of the house, your insurance company will arrange to assess the safety of the building, and the cost of restoring the home to its previous state. Note that if you did renovations/upgrades and didn’t let your insurer know about it at the time, they may only pay to rebuild it the way it was prior to the renovations.
When you have a partial fire loss, it’s more important that you document any of your possessions that were damaged and/or destroyed. Gather any receipts you have. As soon as you safely can, try to get into the house and take pictures of damaged items. If some items are completely destroyed beyond recognition, most insurers will pay for reasonable losses. In other words, if the fire was contained to the kitchen, they will likely pay for new pots and pans, but probably not for the $2,500 set of golf clubs that happened to be in the kitchen at the time.
Quick tip: Should I make a claim?
When you have a minor loss (under $5,000), you may want to think carefully before starting a claim with your insurance company. Unlike car insurance, your insurance company can raise your premium or refuse to renew your policy if you make too many claims, even if none of the claims are your fault (there is no determination of fault in a home insurance claim). Remember that insurance is there to protect you from losses that you can’t afford to deal with on your own. If you suffer a minor loss, try to calculate the cost, subtract your deductible, and then decide if it’s worth a claim. Especially if it’s not your first claim in the last five years, your premiums could go up dramatically.