What Does Homeowners Insurance Typically Cover in Fire-Prone Areas?

 When you purchase a property, you must obtain home insurance to protect it from a range of unforeseen circumstances that could cause harm. In most cases, your homeowner's insurance policy covers repairs if a fire damages your home. However, you might need to get separate wildfire insurance coverage if your house is situated in a high-risk area for fire damage, such as Colorado Springs, CO, or Oklahoma City, OK.

Here is a breakdown of what repairs your homeowner's insurance probably covers in fire-prone areas to help you be ready for unanticipated wildfire damage and evaluate whether you'll need to get a separate wildfire insurance policy.

Does the damage caused by wildfires get covered by my homeowner's insurance?

Typically, wildfire damage is covered by your homeowner's insurance policy. For instance, the policy often offers coverage to assist in repairing or rebuilding your home and other properties if a wildfire damages them. Some insurance plans can also pay for the price of renting a temporary home, replacing your possessions, and repairing the landscaping. However, depending on the policy and the wildfire danger in your location, the price and scope of coverage may change.

What kinds of coverage for fire damage can a homeowners insurance policy offer?

Three categories of coverage are typically included in homeowner's insurance: coverage for the dwelling, coverage for additional structures on the property, and coverage for personal items. Here is what might be covered under each of your policy has fire damage coverage:

1. Dwelling coverage

As per best real estate blogs, the physical structure of the house and any related buildings, such as a garage or deck, are typically covered under dwelling coverage and will be replaced or rebuilt. Based on a formula that takes local labor expenses and the cost of materials into account, your insurance policy will outline the maximum amount it will pay to reconstruct the complete property. Remember that prices for labor and building supplies have just increased dramatically. It would be best to check your policy to make sure you are covered at the local labor and material rates in effect right now.

2. Coverage for “other structures”

As per the commercial real estate blog, you can replace anything that isn't tied to your home with "other structures" coverage. These could be a detached garage, a fence, or a shed. A percentage of your residence coverage is often used to calculate this coverage. For instance, if your coverage limit for other structures is set at $35,000 and your dwelling coverage is $350,000, your limit for other structures would be $35,000 as well. If you recently installed any structures, such as an in-ground pool or gazebo, it's a good idea to examine and renew your policy to make sure you have sufficient coverage.

3. Personal property coverage

Your possessions are covered under personal property insurance. Personal property such as appliances, furniture, artwork, apparel, sporting goods, tools, and gadgets may be covered by your homeowner's insurance policy. The typical limits for this coverage range from 50% to 70% of your dwelling coverage. For instance, if your home had $350,000 in coverage and your personal property limit was set at 50%, you would have $175,000 to replace your possessions, says best real estate blogs.