While most home insurance policies cover fire-related damage, fire damage that is due to arson is excluded from coverage. It is crucial to understand what arson is, why it is excluded, and how it may be determined to be the cause of a fire.
Fire damage happens very frequently in the U.S. According to the National Fire Protection Association, a fire department in the country responds to a fire every 23 seconds as of 2022. Most of these fires occur in residential properties around the country. This common occurrence can be devastating to a homeowner if it is their home that is damaged or destroyed by one of these fires. A homeowners policy is important to be economically protected from fire damage, but if the fire is the result of arson, not only is the home damaged or destroyed but now the economic reimbursement is gone as well. This leaves the homeowner to foot the bill for any sort of repairs or replacement.
- Insurance companies cannot deny your request for compensation for no reason at all. It is most likely that they will not allow a claim due to suspicion or speculation that an intentional fire (arson) has occurred. Before denying your claim, they must provide solid evidence and facts that the fire damage was caused by arson.
- You need to work closely with your local fire department’s investigator who will be inspecting your property. In some cases, you can hire an independent fire investigator to get a second opinion on the fire damage.
What is arson?
Arson is the intentional act of setting fire to a property. The property can include anything whether it be a house, car, wilderness, or anything in between. The intentional act means that the person deliberately or willfully intended to set fire to something. This means that if a fire was caused by some, but it was accidentally or unintentionally started, it does not constitute the act of arson. Arson is a criminal act that can lead to severe penalties or jail time.
Why would arson be excluded?
Arson is generally excluded from coverage by insurance providers due to its criminal nature of it. Due to it being a criminal offense, insurance companies then have the discretion to deny coverage. This regulation was put in place to protect insurance companies from homeowners who may try to take advantage of their policies and their current living situation by intentionally setting fire to their own homes. There have been many cases in the past where a homeowner has attempted to do just this thing.
Of course, there is a flip side to this regulation. With arson being something that can be excluded from coverage, but other fire-related damage to home almost always being included, this has allowed the insurance companies to now take advantage. At the conclusion of the investigation done by the fire department and/or insurance company, if the cause of the fire cannot be determined, in many instances it will be deemed to be arson. This gives insurance companies the ability to deny many claims that may not be the result of arson. There have been multiple examples of insurance providers abusing this regulation.
Arson is one of the top reasons why insurance claims are denied, which can be a devastating blow to a homeowner whose home was damaged or lost due to fire.
What fire-related damage is covered?
Many other instances of accidental fire-related damage are typically covered under a standard homeowner’s policy. It is important to read through one’s home insurance policy to know what perils are covered and what perils are excluded. It still may be the case that homeowner negligence that resulted in an accidental fire may lead to a claim being denied. Luckily most of the time fires are deemed to be accidental in nature and will usually be covered under one’s home insurance policy.
It is also very important to notify the insurance company as soon as possible after a fire in order to expedite the process and have the best chance of the claim being covered.
A fire can have a hugely detrimental impact on a homeowner and their family. Unfortunately, arson allows the insurance company to not make the homeowner financially whole if the company so chooses. The regulation that allows arson to be excluded from coverage was implemented with good intentions but may lead to some innocent people being left with nothing.
Talk with your insurance company and compare with others to understand what they may do in the event of a claim where arson is deemed to be the cause of the damage. Some companies may be more lenient than others.