Is Your Home Adequately Insured For A Fire?

Staff | 05/13/2019

Between the chaos of ensuring that everyone is safe and then having to figure out what you will do after...a fire is one of the most devastating situations for any homeowner or building owner will ever have to deal with. The reality is, it can happen to anyone and it is advised that owners be proactive and adequately insure their buildings.  So, is your building adequately insured from a fire? To understand better, here is what you need to know.

Different Insurance Policies Have Different Coverages

The type of policy you choose, whether it be a type of homeowner policy or a condo policy, will determine the risks covered. As a building owner, you also have the option of buying a fire-only policy, but these types of policies do not cover liability or theft. On the other hand, a standard homeowner's policy offers protection for your home and its contents in the event of a fire. This coverage extends to the dwelling, detached structures, such as sheds or fences, and personal property including furniture, appliances and clothing.

Actual Cash Value vs. Replacement Cost Value

As a homeowner/building owner, you have the option of insuring your home/building and your personal property on an actual cash value or on a replacement cost value.

  • With actual cash value, the insurer will pay to replace your home and personal property based on the depreciated value of the home and items at the time of the fire. Insurers will take the replacement cost value and subtract depreciation to date to calculate the actual cash value. For many homeowners, this option is considerably cheaper to insure as compared to the replacement cost value. But with this option, you might find yourself in a tough position in the event of a fire because the cost to replace the damaged home or items will be much higher than the actual cash value a homeowner receives.


  • Replacement cost coverage provides homeowners and building owners with the full cost of replacing your home/building and personal property. This option does not take account of depreciation and the replacement cost a policyholder will receive is up to the limit of the policy. Typically, replacement cost coverage is, on average, only about 5% to 10% more in premiums sometimes even less.

What Is The Value Of My Claim?

Apart from choosing a type of policy and knowing the basis of claim settlement, actual cash value or replacement cost coverage, processing a fire claim will depend on how much proof and the type of proof you have. Can you accurately describe, document and show proof of the lost/damaged property? Having accurate evidence will mean that the insurance company will be less likely to use some type of arbitrary “guesstimate”.

So what do you need to document and have as evidence to prove your loss amounts?

  • Paperwork that show the make, model, ID numbers, serial numbers, etc.
  • Original purchase documents, invoices, receipts, etc.
  • Videos and photographs are always helpful
  • Appraisals of the building, home, and contents
  • Schedules of any artwork, jewelry, collections including valuation of each item

Insurers understand that for small personal belongings such as clothing, books, etc, you probably won't retain receipts, but for larger or high value items including furniture, equipment, electronics, artwork and jewelry, etc. it is advisable to retain the original purchase documents/certified appraisals. You also want to ensure that your evidence and documentation is stored in a place away from your home or office building, so that in the event of a fire, you are still able to retrieve those documents to use when you make a claim.

How Do I Know How Much Coverage I Need?

To tell you the truth, there is no ‘one size fits’ all formula that works for every client. Your coverage should be formulated based on the replacement value of your building, your home, its contents.  Also, try to factor in what you can afford to pay “out-of-pocket” should there be a fire as part of your coverage decision.

Why Come to Massey, Clark, Fischer?

At Massey, Clark, Fischer, since 1958, we understand this process from A-Z. We advise our clients on the type and value of coverage they buy and what they need to consider when choosing a fire insurance policy. We guide our clients through the appraisal process and even with the processing of their claims. In addition, Massey, Clark, Fischer represents a number of different quality carriers that cater for both residential and commercial properties. Want to ensure that you are adequately insured? Give us a call today! We would be happy to advise you...and our services come at no cost to you...they are paid for by the insurance companies!


Disclaimer: The above description provides a brief overview of the terms and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy for full details about coverages. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.

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