Did you know that over half a million properties are destroyed by fire every year? According to the National Fire Protection Association, 78% percent of that fire damage occurred in residential properties.
If a fire has damaged your home, you’re not alone! However, you’re probably feeling overwhelmed. Fires can cause emotional trauma and anxiety. At the very least, dealing with the aftermath can be a tedious and frustrating process. Things only get more complicated and stressful if you’re having problems with your insurance claim.
The standard homeowner’s insurance will cover some or all damage done by fire. However, you might be facing confusion regarding what is actually covered by your policy. There are a lot of gray areas when it comes to insurance coverage, and your insurance company might be relying on this ambiguity to talk you into a lower settlement.
As an insurance claim law firm, we’re here to help clarify things and help you get the settlement you need to move on with your life! Below are some important facts about fire insurance in Naples, FL so that you can get the answers you need!
What Does the Average Fire Policy Cover?
When buying homeowner’s insurance, the following aspects of your home and possessions will most likely be covered in the event of a fire:
- Dwelling. The typical home insurance policy will cover fire and smoke damage to your dwelling and any structures attached to it (such as a sun deck or garage).
- Detached structures. Your homeowner’s policy will also typically cover structures that are not attached to your dwelling but are on your property – such as detached carports, tool sheds, fences, a pool or BBQ area, and probably also landscaping, says Insurance.com.
- Personal property. The average homeowner’s insurance policy includes coverage for personal belongings that are damaged or destroyed by a fire. Personal property normally includes furniture, appliances, and clothing. However, the typical homeowner’s insurance policy will most likely not cover losses for unique valuables such as paintings, art, antiques, or even some especially expensive electronics. You will likely need to purchase additional coverage for belongings like that.
Cash Value vs. Replacement Value:
When choosing an insurance policy, you’ll have the option to choose coverage for “actual cash value” or “replacement cost.” It’s important to know the difference or you could be in for an unpleasant surprise when it comes time for your settlement.
- Actual cash value – this type of policy will cover the expenses needed to replace your home or possessions as they were at the time of the fire (i.e. if your stereo system was five years old, your settlement will cover the purchase of another five-year-old used stereo), minus a deduction for depreciation, up to the limit of your policy. Most standard homeowner’s policies offer actual cash value protection.
- Replacement cost. This kind of policy will cover the true cost of replacing your home or possessions (no deduction for depreciation) up to the limit of your policy. This option is usually an add-on that you’ll need to choose when buying insurance.
For example, if you choose the actual cash value option, and your computer is destroyed in a fire, you will be paid a settlement according to what that computer would be worth if you sold it at the time of the fire. Computers lose value over time, so your settlement will reflect the depreciation. While you might have purchased your computer for $1000, your settlement might only reflect the current resale value of a few hundred dollars or less. In contrast, if you purchase replacement cost insurance, your settlement will reflect the money you need to buy a brand new computer of the same make and model.
Replacement cost policies might seem ideal, but they are much more expensive, costing an average of 10% more than actual cash value policies.
What About Additional Living Expenses Caused By Fire Damage?
Most homeowner’s insurance policies will cover Additional Living Expenses (ALE), which covers additional costs of living away from home if your home was damaged by a fire. While your home is being repaired or reconstructed, ALE will normally cover hotel bills, restaurant meals, and other living costs that are higher than your normal living expenses would be without the fire damage. Of course, like other parts of your policy, ALE does have limits.
Was Your Claim Denied?
Are you facing challenges in getting the insurance payout that you believe you’re entitled to? The Law Offices of Michael M. Raheb, P.A. are here to help you sort out denied insurance claims in Naples, FL and get you the settlement that you’ve been paying those premiums for! Contact us today at 239-226-0888 or online!
2423 First Street,
Fort Myers FL 33901
Fax Number: 866-949-0888