What to Expect From Homeowners Insurance After A Fire

WRITTEN BY: Amelia Ciffone

UPDATED: MAY 12, 2022 | 1 MIN READ

Knowing what to expect from most homeowner’s insurance policies and how to make a claim for reimbursement can make the process simpler for you overall. Each insurance company and individual policy will be different in coverage and the process to follow but note some basics to remember if your home is ever affected by a fire.

A fire in your home can be very frightening, and even a small blaze on the stovetop can cause tremendous amounts of property damage. In most cases, your homeowner’s insurance will cover the cost of repairs and provide reimbursement for personal items that need replacing, but there are limits to this coverage.

An Advance on a Claim

Many homeowner’s insurance policies allow you to ask for a small advance on your future claim. This advance is paid out immediately after a fire and before your actual claim paperwork is filed, to help you purchase items you might need in the interim.

As an example, if a house fire destroyed your home’s bathroom and bedroom, you might be left without a toothbrush, shampoo, and even clean clothes to wear! A cash advance against your future claim will give you money enough to buy immediate necessities.

When asking for an advance on a claim, save your receipts, and note that this advance is typically deducted from the reimbursement amount you’ll receive after you file a claim. In other words, don’t use the advance to buy new designer suits if you’ve just lost a few pairs of jeans in that fire, as you’ll only be reimbursed the cost of those jeans minus your advance. This might leave you with very little money left over, if any, to replace the rest of your items!

Filing a Homeowner’s Insurance Claim 

  • Insurance carriers always require policyholders to file a claim as soon as it’s reasonably possible. Contact your agent to report the fire as soon as you and your family are safe.
  • Keep a binder, folder, or bin on hand so that you can store all your receipts, reports, and other items in one place; make a note of when you called your agent and keep that with the rest of your papers.
  • Your insurance company will typically require you file a “proof of loss” claim, itemizing the things you’ve lost and their value. Try to be as specific as possible to get the most value from your claim. Include brand, year, and model numbers where possible.

Reimbursement for Living Expenses After a Fire

  • A homeowner’s insurance policy has a “loss of use” clause, entitling you to reimbursement for living expenses when your home is damaged. This reimbursement is typically just for anything beyond normal; for example, suppose you always spend $200 a month on groceries but need to eat out more often while your home is being repaired. If you spend $250 on food for the month, you’ll be reimbursed that added $50, not your entire grocery bill.
  • If you’re staying at a hotel after a fire, you will probably be reimbursed for your total expense, but note any details about this provision before checking in! Your policy might have dollar or percentage limits, so don’t assume you can stay at a lavish spa for weeks on end and that your insurance company will foot that bill!
  • If you stay with family or friends while your home is being repaired, you can often claim a reasonable amount of expenses for them, even if they don’t actually charge you. This is because your friends’ utility bills will no doubt increase due to your stay, and they might also face other incidental expenses to accommodate you. Be prepared to negotiate this amount with your insurance adjuster. Having records of utility bills will strengthen your claim.

Getting Repair Estimates After a House Fire

An “actual cash value” homeowner’s insurance policy reimburses you for the monies it would take to return you home to its market value before a fire. If your home was very rundown, this reimbursement might be quite low.

A “replacement cost” policy entitles you to the amount of money it would take to replace the home and its contents, meaning your furniture, electronics, and so on. This policy usually has a stated limit.

These policies are typically based on a market value estimate of the home’s value before the fire; your insurance agent will often come up with their own figure, but remember that it’s better for them to lowball this figure! You can hire an independent estimator and use their numbers to negotiate a higher payout from your policy, if possible. A public adjuster can also help with this.

Avoid These Mistakes After a Fire

Insurance companies often want to settle claims as quickly as possible, as it’s easy for homeowners to overlook damage to their home or belongings right after the shock of a fire! Don’t be quick to settle claims and never allow an insurance company to tell you when a claim is settled; make sure you fully agree to a settlement before signing release paperwork.

Don’t Cash a Check That Says “Full Release” Unless You’re Happy with Your Claim

If the insurance company sends you a check that says it’s for “full release of” your claim before you’ve agreed upon a settlement amount, don’t accept that statement from them! Cross out that phrase and send your insurance company a letter back right away, telling them that you have not settled your claim and you will be cashing the check, but not as a “full release of” your claim.

Keep Paying Your Homeowners Insurance!

Also, avoid the mistake of stopping your homeowner’s insurance policy payments while your home is being repaired. Remember that your policy protects more than just damage to your home; it also reimburses someone for injury while on your property, and for injury or property damage caused by your pets while at someone else’s home! Keep paying your premiums while your home is being repaired so you don’t lose that protection after a fire.

Source: Nolo.com