Fire Insurance for Homeowners in California: Three California wildfires continue to ravage California, destroying more than 7,000 structures and displacing hundreds of thousands of people. With heightened wildfire activity across California, obtaining insurance is tougher than ever – more insurance companies aren’t renewing policies for customers in high-risk areas and premiums are on the rise. Here’s what you need to know about your coverage and filing a claim for fire insurance.
Fire Insurance for Homeowners in California complaints about being dropped from their plans increased threefold from 2010 to 2016.California Insurance Commissioner David Jones told the AP he expects more rate increases and more policies to not be renewed, particularly in high-risk fire areas. Consequently, the search for a new or replacement policy may be a little more grueling and costly than it used to be.
What is fire insurance?
Fire insurance is a type of property insurance against fire loss or damage. Typically, a standard homeowner insurance policy will include coverage in the event of a fire. As long as you’ve been paying your premiums, the standard homeowner’s insurance policy covers fire damage to your home, structures on your property, and most of your belongings. However, it’s possible you’ll need to pay more for additional coverage if you live in a high-risk area or if you’re not able to find coverage in the open market.
What does fire insurance cover?
Whether you have basic coverage with the California FAIR plan, or you have limitations on your homeowner’s policy, it’s important to know the extent of your coverage. If your whole house burned down, it used to be that you had guaranteed replacement, insurers started to rethink this and apply an absolute limit on what they will pay.
A “replacement cost” of your home covers the cost of a damaged home with a similar home, but some insurance companies can limit that at 20% over the face value of the policy.
How do you file a claim after a fire?
As with any kind of insurance, the first step to filing an insurance claim is documentation. This can provide helpful evidence if an insurer disputes, say, that you owned a state-of-the-art home-theater setup. The insurer will then send a claim for damage assessment, using a local contractor as a guideline to use for an estimate, which can help you negotiate with your insurance company’s contractor (who you’re not required to use).