Florida Homeowners Insurance Definition: What Is Fire Insurance?

What is Fire Insurance? Fire insurance can be defined as a form of property insurance, wherein the insurance provider agrees to pay a certain amount that is equivalent to the estimated property loss caused due to fire.In some cases, standard homeowner's insurance policies include fire insurance in their coverage whereas in other cases, the insured person may need to purchase fire insurance separately by paying additional amount. Before choosing a property insurance policy, it is very important for the property owners to check whether the fire insurance policy is a part of the standard insurance policy.

Extent of coverage under a fire insurance policy: Fire insurance offers protection for the estimated value of the property; however, there are many exclusions to the same. For instance loss of pets and human life, medical bills, damage to the landscape, loss of personal belongings, damage to the structures outside the property (such as gazebos and garages) can all be covered under an insurance package of extended property insurance. Types of Fire Insurance Policies:

1. Comprehensive Policy: This is an all-in-one policy that compensates for the loss caused by not only fire but also burglary, theft and third-party risks.

2. Specific Policy: In specific insurance policy, the actual value of the property isn't considered when determining the compensation amount. As per this fire insurance policy, the insured person has to pay a certain specified amount that is lesser than the real value of the property.

3. Valued Policy: In this insurance policy, the amount of the compensation is fixed and the actual loss caused due to fire is not taken into account.

4. Re-instatement or Replacement policy: This insurance policy is based on the re-instatement clause, which makes it essential for the insurance provider to provide compensation for replacing the damaged property. Thus, as per this insurance policy, the insurance provider can choose to re-instate the property instead of giving out cash.

The cost of a fire insurance policy can vary. The presence of sprinkler systems, fire alarms and other safety features can lower the cost of the insurance policy significantly. Living in a region that is prone to wildfires will increase your insurance cost. Since, many individuals buy fire insurance for their properties and businesses, insurance providers have a large risk pool. Due to this, fire insurance can be comparatively less expensive than other specialized insurance policies, such as flood or earthquake insurance.