What Does Homeowner's Fire Policy Insurance Cover?
Fire can destroy your home. Homeowner's insurance can help you rebuild it.
Homeowner's insurance comes in several forms, the Insurance Information Institute states. If you take out an actual-cash-value policy, it will pay the original purchase price of whatever was burned, less depreciation for the years you've owned it. Replacement-value policies cost more, but will cover the cost of rebuilding or replacing damaged property, which is often more than the depreciated purchase price. Guaranteed or extended-replacement-value policies cover replacement costs even if they exceed your total coverage.
Homeowner's policies insure both your building and the contents against fire damage. Typically, the Insurance Information Institute states, the contents--personal property including furniture, clothes and books--will be covered for 50 to 70 percent of the building coverage: If your policy insures your house for $320,000, your contents should be covered for
at least $160,000. Many policies limit how much they'll pay for individual items--a fur coat, a diamond necklace or a Monet painting, for instance--so if you have something expensive, you may need to buy extra coverage.
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