Fire cover in home insurance

While fire is an insured event there is no standardised definition of fire damage across insurers. Make sure you check the Product Disclosure Statement (PDS) to see exactly what is covered and if there are any coverage limits.

‘Fire insurance’ is not a specific type of insurance product; rather, it’s an insured event included in all home and contents insurance policies. Your home and contents insurance policy is designed to cover you in the event a fire damages or destroys your home or possessions.

Otherwise known as home buildings insurance, a home insurance policy covers the rebuilding costs for your home up to your sum insured (i.e. how much your home is covered for), but not your contents within it; this is why it’s important to have contents insurance (potentially as a combined policy for homeowners or standalone for renters) so your possessions are also covered for fire damage. The type of coverage you have (home insurance cover, contents only or combined cover) and which items are damaged will determine whether you can make a claim or not.

The amount you receive from your insurance claim will depend both on your level of cover and the value of your home and contents. If your home and possessions are a total loss, your elected insured amount should adequately cover the repair and replacement costs.

If you’re unsure of the value of your home, you may need a professional property valuation to give an accurate assessment of your sum insured.

There’s a lot of work involved in repairing a home or replacing contents damaged by fire. Fortunately, home and contents insurance policies can help by covering a variety of different costs that can come up following a fire.

The table below shows the different things that home and contents insurance may typically help with when it comes to fire insurance coverage. Be aware that these lists aren’t exhaustive, and fire cover varies between insurers.

Always read the PDS of a new policy document before you buy and remember that cover is subject to your insured sum, limits, exclusions and policy limits.

If someone deliberately attempts to set fire to your house, this may be covered under home and contents insurance in the same way that vandalism and other types of malicious damage are. However, if you, a tenant or a house guest starts the fire (either deliberately or through intentionally reckless/illegal acts), this is likely not covered.

If you start a fire by accident, you can be covered by home and contents insurance. Whether you put a candle too close to the curtains or you have a cooking disaster, most home and contents insurance covers flame damage caused by accidents.

If there are other types of fire damage, like scorching or melting but there was no flame, this may fall under accidental damage cover which can sometimes be additional coverage that needs to be purchased in order to add it to your policy.

Fire protection is particularly crucial in Australia, a country that’s no stranger to this natural disaster. During the summer months, raging bushfires and wildfires could destroy the homes and belongings of many people across the country.

Thankfully, home and contents insurance could provide a payout towards the repair or rebuilding of your home and belongings inside it if it’s damaged by fire, protecting you from major out-of-pocket costs and giving you peace of mind.

Renters can get renters insurance which is a contents insurance policy that will cover their personal property from a range of events, including fires. If you’re renting, it will also offer you legal liability cover should you be found liable for a fire that destroyed the building you were renting in.

Fire cover is automatically included in home and contents policies, so you pay for it through your premiums. However, the amount a policyholder would pay in premiums can be influenced by the risk of a house fire at your address, as well as the estimated cost of rebuilding, repairing or replacing your home and personal belongings.

For example, living in a bushfire-prone area may increase your insurance costs, as your insurance provider will see the property coverage as a higher risk. Likewise, if your contents would cost a significant amount to replace, you may pay a little more for your property insurance and contents insurance to reflect this higher value.

Whether an insurer accepts your claim for fire damage usually depends on the details of the incident. While each claim is assessed on its own merits, generally, in the event of a fire, damage from flames is covered, but many insurance providers don’t cover scorching, melting, smoke damage or soot damage where there is no flame.

Some providers may cover smoke or soot damage where there was no fire by adding an option of accidental damage cover to your home policy. This could then cover accidents, for example, in the kitchen where a scorched benchtop is a result of setting down a hot pan on the bench.

If your smoke alarms aren’t maintained, your home may not be following your state or territory’s building legislation, and this means your insurance claim could be denied. It’s vitally important that your home complies with the rules of your state or territory.