Fire Insurance in USA

In the USA, fire insurance covers ones resulting from explosions or otherwise and the cause must be futuristic or accidental. Thus, it does not include intentional fire, chemical reaction etc. However, it includes fire emanating from its normal place and spreading and damaging properties resulting from attempts to extinguish it with water. It can also be damages from smokes arising thereof or from building collapse etc. The standard Fire insurance in USA covers incidences of lightening, fire (from explosion or otherwise) and explosions of boilers or gas cylinders. In some cases, there can be add-on policies to the standard fire insurance policy such as flood, explosion, burst pipes, bush fire, riots and strikes, tornado and cyclone, earthquake damage etc and it is subject to the payment of additional premiums.

Meaning of fire insurance

Fire insurance in USA is a type of insurance policy that ensures the protection of the policyholder against losses and damages to property resulting from fire or explosions.

It is a form of property insurance but a great percentage of its policies come with some form of fire coverage. However, some landlords usually buy additional fire protection coverage in the event their homes are completely or partially lost as a result of fire.

These additional or add-on coverage helps to provide the cost reconstruction, replacement of property even beyond the limit set by the policy. It is noteworthy that fire insurance policies come with exclusion clauses to take care of intentional fires, acts of god such as hurricanes, volcanoes, nuclear risks and similar perils.

Similarly, the Policy provides indemnity either on a replacement of cost basis or through the provision of actual cash value of damages.

Benefits of Fire Insurance in USA

There are numerous benefits in buying fire insurance in USA and some of them include;

1. The policy ensures the protection of the policyholder and family against the losses arising from fire incidents, explosions and others.
2. Provides coverage to policyholders against loss/damage to their homes and possessions.
3. Fire insurance Policies may also provide coverage in the event of injuries while on the property.
4. In mortgage transactions, lenders most times require that you have a fire insurance policy to enable them advance loans to you. In this sense, fire insurance policy provides security for mortgage loans.
5. Fire insurance gives coverage against fire loss or damage from various causes such as fires as a result of electricity surge, gas explosions, lightning and other sources.
6. It also helps business owners to protect and grow their businesses by having a fall back in the event of business loss from fire outbreak.
7. Fire insurance can provide a new property for you in the event of total or complete loss of property through replacement.
8. Fire insurance policy affords the Policyholder peace of mind.
9. The insurance company may reimburse you the actual market value of your insured property
10. It also provides third party liability protection. That is, damages to other persons in the property.
11. Provides coverage for employees in the event they sustain injuries or loses in workplace from fire incident.

Disadvantages

1. Does not provide insurance coverage in the event of negligence or intentional fire or explosions. In other words, the holder must not be found to be negligent or responsible for the cause of the fire outbreak or else, there may be denial of insurance benefits.
2. The premium payable for fire insurance policy may be too expensive.

Types of fire insurance

There are various types of fire insurance policy and some of them are as follows;

1. Comprehensive insurance policy
2. Valued policy
3. Blanket policy
4. Consequential policy
5. Third party policy

Comprehensive Fire Insurance Policy

The coverage here is wide with little or no limitations. However, it is the most expensive of all other types of fire insurance.

Cash value policy

This is the type of fire insurance in USA where the policy stipulates the amount payable by the company in the event of loss. In the event of lass, the insurance company will pay the full amount of compensation as in the face of the policy.

Consequential policy

This is the type of coverage that operates to provide indemnity to losses in consequence of a fire incident such as the cost of renting an alternative accommodation etc.

Blanket coverage

Here, a single policy will insure different properties in different locations against the risk of damage due to fire.

Third party fire insurance in USA

This third party policy serves to afford protection to other persons who sustain injuries and looses in the incident of fire outbreak other than the policyholder.  

Conclusion

Fire insurance in USA policy is very important for the protection of our properties against the risks of fire and explosions.

It is advisable that a Holder of a policy should adopt the practice of valuing the property on a yearly basis to find out if there is need to increase the amount of coverage. This is not withstanding that an increase in the amount of coverage will lead to an increase in the amount of premium payable in the policy.