These 5 Things Aren’t Covered by Home Insurance: What to Know Before Fire Season

However, homeowners insurance doesn’t automatically cover everything in and around your home. Unfortunately, many homeowners don’t learn about these exclusions until it’s too late.

With wildfire season approaching, it’s important to recognize what is covered – and what isn’t covered – by a standard homeowners insurance policy after a fire.

The Cost of Replacing Your Possessions

When buying homeowners insurance, you choose from an actual cash value (ACV) policy or a replacement cost policy.

Most insurers use actual cash value as the default choice because it’s cheaper. That could change the way an insurer processes your claim:

• With actual cash value (ACV) coverage, the insurer deducts depreciation from each of your fire-damaged possessions. Your TV may have been worth $2,000 a few years ago, and it may cost $1,500 to replace that TV today. However, the TV itself is only worth $435 today, and that’s what the insurer pays you.
• With replacement cost coverage, the insurer compensates you based on the actual replacement cost of your fire-damaged items. If it costs $1,500 to replace your couch with a similar couch today, then your insurer pays you that amount. Generally, you need to actually replace the couch and provide your insurer with receipts to receive compensation.

Possessions Worth Over $1,000

Insurance doesn’t automatically cover everything in your home up to its full value.

Instead, insurers generally cover items up to $1,000 to $2,500. Items beyond that limit may require additional coverage.

Some insurers also have different limits for theft versus house fires. An insurer might have a coverage limit of $2,500 for firearms and electronics when stolen, for example. However, that coverage limit drops to $1,000 for fires and other damages.

According to The Zebra, common coverage limits include:

• Electronics: $1,000 to $2,000
• Firearms: $2,500 (theft only)
• Jewelry & Watches: $1,500 (theft only)
• Money, Coins, Gold, & Other Valuables: $200 to $2,000

To avoid these limits, add a scheduled property endorsement to your insurance policy. You list specific high-value items on your insurance policy, and insurance protects these items from theft and damages – including a house fire.

Mold

Some homes develop mold damage after a fire – say, from firefighting efforts.

When firefighters use water to extinguish a fire, it creates a humid environment, making it easier for mold to thrive.

Unfortunately, a standard homeowners insurance policy doesn’t cover mold. It covers fire damage and water damage, but it doesn’t cover mold removal or remediation.

Check your property (if safe to do so) after fire damage occurs. If your home was damaged by fire and water, then mold could be hiding behind walls. Consider hiring professionals to check for mold. These professionals use specialized equipment to track mold, ending a mold problem before it’s out of control.

Post-Fire Mudslides & Landslides

A forest fire can increase the risk of local mudflows and landslides.

For insurance purposes, there’s a big difference between mudflows and landslides – and it could affect whether or not insurance covers the event.

When a fire tears up a landscape, it destroys the trees that hold the landscape together, increasing the risk of future earth movements.

Most homeowners insurance policies cover fires. However, most do not cover mudslides or landslides:

• Mudflows are considered flood damage. A standard homeowners insurance policy doesn’t cover flood damage.
• To get coverage for mudflows, consider buying flood insurance through FEMA’s National Flood Insurance Program (NFIP).
• In many cases, flood insurance is cheap for those living in fire-prone areas. If you live in a mountain community, for example, then you could have a high risk of fire but a low risk of localized flooding. For a few hundred dollars per year, you could be protected against landslides and mudslides.
• Insurers distinguish between mudflows and landslides. Landslides are considered an “earth movement” – similar to an earthquake. To get covered against landslides, you may need to buy earthquake insurance.

Even if your home avoided fire damage, it could be at a higher risk of experiencing mudslide and landslide damage in the future. Unfortunately, insurance is unlikely to cover this damage.

Items You Cannot Prove You Lost

Maybe you just bought a new 85” TV. Maybe you finally bought that L-shaped couch.

If you can’t prove you lost an item in the fire, however, then you might as well have not owned it at all, for insurance purposes.

Insurers want to avoid fraud. After a fire, some homeowners try to claim more than they owned to increase payout. If you can’t prove you owned a specific item at a specific value, then your insurer could challenge that claim.

Some homeowners keep an inventory of all items in their home – especially higher-value items. Some keep careful track of all receipts and other documentation.

Most homeowners, however, do not think about any of this until it’s too late – say, after a house fire occurs.

If you can’t prove you lost an item in the fire, then insurance won’t cover it.

How to Check Your Risk Before Wildfire Season

Fires are becoming more common and more devastating than ever.

You may have previously lived in a safe area – but your local risk has changed over time.

We recommend three ways to check wildfire risk, including:

1. US Forest Service’s Wildfire Risk Website: WildfireRisk.org is an online service from the US Forest Service. Enter your address, community, county, or state to check local risk.
2. FEMA’s National Risk Index Map: Enter your address into FEMA’s online form to view your risk of various natural events – from hurricanes and tornadoes to floods and tsunamis.
3. First Street: FirstStreet.org has similar mapping data along with future forecasts. Before buying a property, for example, you may want to check its risk today and 30 years in the future.

By checking risk and understanding your insurance policy, you can give yourself the best possible chance of avoiding catastrophic risk from forest fires and other severe weather.

Stephanie Corona

Stephanie is a property insurance claim expert with over 20 years of experience working as an insurance adjuster, expert witness, appraiser and umpire. She is passionate about sharing her expertise, knowledge, tips and training to help both property owners and Public Adjusters in their pursuit of effectively managing claims and recovering the claim settlement they deserve after a loss.