Understanding a Dwelling Fire Policy

A long, long time ago, property insurance was only limited to cover against fire and lightning. In history, this was the time the term fire policy was introduced. If anything besides fire had damage your home, you were simply considered out of luck during those times.

Now comes the term dwelling fire policy which is referred to a basic policy insuring a structure or a shelter so people can live in. As we move on, you will be reading more about dwelling and stuff policies.

Why People Require a Dwelling Fire Policy

The dwelling fire policy which only covers the structure has its own place in property insurance. This policy is common to landlords who do not have the interest of insuring the dwelling’s contents. But as an added feature, most insurers offer a small amount of coverage for the contents of the structure on a dwelling fire policy. Frequently, landlords require a few thousand dollars for appliances coverage they furnish to a renter.

On the other hand, a renter’s insurance policy can protect the renter’s stuff inside the dwelling of a landlord. Get one. It has always been a common insurance myth that your stuff is covered by the landlord’s insurance policy. Avoid joining several thousands of people in the U.S. whose belongings had been destroyed by fire and left without coverage.

Vacant properties can also be insured by a dwelling fire policy form. The dwelling fire form is a more restrictive policy that covers properties that are considered inherently more risky for an insurer.

Vacant property that is just waiting for a buyer can also have the dwelling fire policy. Insurance rates differ according to its conditions such as; unoccupied, occupied, the not ready to be occupied or ready to be occupied.

It is possible to purchase a dwelling fire policy for your home that own and occupy as a primary residence. As discussed, the coverage would be a little more restrictive than the homeowner’s insurance policy. However, it may include special and partial coverage of your stuff in the house too.

The Complications of a Dwelling Fire Policy

The dwelling fire policy covers the structure, but property insurance is now more complicated than this. In looking at a fire policy, one must take into account the following; the loss settlement method, the limits of coverage and the perils it is insured against. (Please see other articles in this site about loss settlement method and limits of coverage.)

A million dollar policy limit be worth anything when the insurance company denies your claim. A typical reason is that the peril that damaged your property is not the peril insured against.

The Perils that Can be Insured Against

Generally, two basic categories of perils exist among insurers. They are the named perils and the special perils.

The named perils that are listed as basis for common risks factors in home insurance policies are: fire, lightning, electrical malfunction, burglary, hold-ups, vandalism, windstorms, falling objects, gas leak explosions, broken/freezing pipes, plus the collision of vehicles/aircraft and sometimes injuries to others on and off property. Perils also include property damage to property in the neighborhood, riots and civil commotions and many more. While fire policies are more restrictive in perils, these are also their common basis for named perils.

The special perils coverage form on the other hand is also known as the open perils or all perils against. An insured can actually choose the perils against for his policy. Insurance consumers have had legal battles in the past over an “all perils” policy form but were denied coverage for certain losses. There is no policy that actually covers all possible property damage. Because of this, insurers refuse to use the term all perils for misleading specifics. Although you would prefer to have the special perils coverage form for your fire policy, specifics for perils against must still be contained in the policy. (Please other articles in this site for Acts of God or acts of nature)