Does Renters Insurance Cover Fire Damage? What You Need to Know

House fires can be devastating when renting. Whether you accidentally left a pot on the stove for too long or were a victim of an electrical fire, you may wonder whether your renters insurance will have your back and cover the resulting damages.

The good news is that fire is typically considered a named peril in most renters insurance policies. However, your policy’s exact coverage can vary depending on multiple factors. Familiarize yourself with whether renters insurance covers fire damages and how you can navigate this unforeseen disaster below.

What Coverage Does Renters Insurance Provide in a Fire?

One of the many benefits of renters insurance is that it provides various degrees of protection in case of a fire. Here is what it generally includes:

• Personal property coverage: This coverage helps you repair or replace your personal belongings that are destroyed or damaged in a fire. It can cover clothing, furniture, and electronics.
  • Check if your policy offers replacement cost coverage or actual cash value coverage to determine how much you’ll get back in case you lose items in a fire.
• Personal liability coverage: If you accidentally start a fire that results in property damage or personal injuries to others, liability coverage can cover the associated property damage, medical expenses, and legal costs.
  • For property damage: A renters liability insurance will typically kick in first if the renter caused the fire. Then, the landlord’s insurance policy will cover any leftover damage.
• Loss of use coverage: Loss of use coverage can help you find a place to stay if your rental unit becomes unlivable due to fire damage. It may help you pay for temporary housing expenses like hotel stays, meals, and transportation.
• Medical payments to others: This coverage typically pays for minor medical expenses for any of your guests who sustain injuries in your rental unit during a fire, regardless of who is at fault.

These are the basic components of a typical renters insurance policy. Most insurance companies let you add on additional policies for extra coverage that standard policies don’t offer:

• Earthquake coverage: Offers protection for fire damage caused by earthquakes.
• Flood insurance: Provides coverage for fire damage caused by floods.
• Scheduled personal property: Lets you protect higher-value items that go beyond the limits of your standard personal property coverage.

What Factors Can Affect Fire Damage Coverage?

Not every situation will result in the same amount of coverage. Here are some factors that can influence the amount of fire damage coverage:

• Coverage limits: Each policy has a maximum limit on the total amount payable for personal property damage. If the fire damage exceeds this limit, the tenant must pay for the excess cost. Additionally, the loss of use coverage may specify a duration (like six or 12 months) during which the insurance provider will reimburse housing expenses.
• Sub-limits for specific items: High-value items, like art or jewelry, may have lower coverage limits than general personal property.
• Deductibles: A deductible is an amount the renter has to pay out of pocket before the insurance coverage begins. A high deductible can lower your premium payments but increase your out-of-pocket expenses when you file a claim.
• Safety features in the rental unit: Adequate safety features, such as sprinkler systems, fire alarms, smoke detectors, and fire extinguishers, can positively impact the fire damage coverage in a renters insurance policy.
• Policy exclusions: A renters insurance policy may not cover a fire that occurs during a lapse in coverage. They may also refuse to cover fires caused by intentional acts or negligent behavior.
• Unit’s vacancy: An insurance provider may only partially cover a claim if the fire occurs in a rental unit that has been vacant for an extended period.
• Property’s condition: A property in poor condition (i.e., it has unresolved maintenance issues) may not qualify for fire damage insurance coverage.

When Would Renters Insurance Cover Fire Damage?

Renters insurance will cover fire damages, but it only applies in certain scenarios, particularly when the fire is accidental. Here are some situations when renters insurance typically covers fire damage:

• Kitchen fires: If you accidentally leave a pot on the stove and it catches fire, renters insurance would likely cover the repair or replacement costs for your damaged belongings.
• Electrical fires: Malfunctioning appliances, overloaded circuits, and faulty wiring can cause electrical fires. Renters insurance typically covers personal property damage if you weren’t grossly negligent.
• Candle fires: If you leave a candle burning and it accidentally ignites nearby materials, your renter’s insurance policy will typically cover the resulting fire damage.
• Wildfires: Renters insurance policies typically cover personal property damage caused by a wildfire. If you live in a high-risk area, you may need additional wildfire coverage.
• Fires after break-ins: If an intruder causes a fire during a break-in, renters insurance will usually cover the theft and fire damage to your personal property.
• Fires in neighboring units: If a fire in a neighboring unit spreads to your rental unit and causes personal property damage, you can use your renters insurance to seek coverage.

When Would Renters Insurance Not Cover Fire Damage?

Here are some situations when a renters insurance provider would deny coverage:

• Purposeful fire: If the policyholder or anyone living in the rental unit intentionally starts a fire, renters insurance won’t cover the resulting damage. Renters insurance specifically refuses to cover intentional acts of arson.
• High-value items: Renters insurance policies usually have limits on or a lack of coverage for high-value items. If you have collectibles, fine art, or expensive jewelry, you must purchase additional coverage or a rider.
• Pre-existing damage: Your policy won’t cover personal property that was damaged before the fire happened.

Tenant’s Responsibilities Regarding Fire Incidents

Tenants have several responsibilities to help prevent fire incidents and ensure the safety of their rental unit. Here’s what they can do:

• Follow lease terms. Follow all fire safety rules in your lease, such as not tampering with smoke detectors and not having open flames in specific areas.
• Engage in responsible behavior. Be mindful when using fire-producing items, and don’t leave them unattended.
• Report maintenance issues. Report issues with appliances, smoke detectors, or wiring to your landlord immediately.
• Prevent fire hazards. Reduce the risk of a fire starting by keeping flammable materials away from flames and not overloading electrical outlets.
• Maintain fire safety. Ensure your unit has a working fire extinguisher and learn how to use it properly. This knowledge can help you control a small fire before it spreads.
• Secure insurance coverage. Acquire renters insurance with adequate fire damage coverage to protect yourself and your belongings in case of a fire.

Expert Insights: Navigating Fire Damage & Renters Insurance

Explore the nuances of renters insurance and fire damage coverage by reviewing our conversation with Susan Chai, a distinguished attorney at Legal Templates:

Question: Suppose an earthquake occurs at the tenant’s property and causes an electrical fire. The fire damages many of the tenant’s belongings. Will the tenant’s renters insurance policy cover the damaged belongings if they don’t have an earthquake add-on for their policy?

Answer: An earthquake insurance policy or earthquake add-on typically covers direct damage to property caused by the earthquake or related “earth movement.” The tenant’s belongings damaged by an electrical fire caused by the earthquake would be considered indirect damage and therefore not likely covered under earthquake insurance.

However, a general renters insurance policy may cover the damaged belongings caused by an electrical fire.

The answer will also depend on the tenant’s state of residence. For instance, California law requires renters insurance to cover fire damage that is caused by or following an earthquake.

So, it’s best to review your renters insurance policy and applicable state law.

Question: Does renters insurance cover smoke damage?

Answer: Yes, renters insurance generally covers smoke damage caused by a fire. The coverage usually extends beyond just the tenant’s rental unit and includes smoke damage caused by fire from neighboring units.

Note that under renters insurance, the smoke damage applies to the tenant’s personal property such as clothing and furniture but does not apply to the walls or floors. Those structural elements fall under landlord insurance.

Question: What are some common misconceptions about renters insurance coverage and fire damage?

Answer: One common misconception is renters insurance coverage is not necessary because the landlord has landlord coverage. However, the coverage for renters insurance versus landlord insurance is very different. Renters insurance covers a tenant’s personal property, while landlord insurance covers the property structure. If a fire causes damage to both personal property and the structure, both the tenant and landlord should file claims with their insurance providers.

Another misconception is renters insurance will cover all damages caused by a fire. In actuality, the cause of the fire, accidental or intentional, is critical. Renters insurance typically only covers damage caused by accidental fires. Intentional fire damage is not covered by insurance carriers. Also, renters have to keep in mind that insurance policies are subject to policy limits, exclusions and deductibles.

Question: What happens if a tenant causes a fire and the landlord’s insurance doesn’t fully cover the damages?

Answer: The first consideration is whether the tenant caused the fire accidentally or intentionally. If the fire was caused intentionally, most insurance policies will not cover the damages. Assuming the fire was accidental, landlord insurance policies will cover structural damage.

If the landlord’s insurance policy does not fully cover the property damage, the tenant’s renters insurance liability coverage may reimburse the landlord for the damage.

If there is still a gap, the landlord and tenant can work together to come to an agreement regarding the difference. For instance, the tenant agrees to repay the landlord for any uncovered damages, which is often documented in an I Owe You (IOU) agreement. While an IOU is typically sufficient, a loan agreement can document larger amounts owed.

Protect Your Belongings with Renters Insurance

When renting an apartment or house, it’s essential for you to purchase your own renters insurance policy for protection from fire damage. If an accidental fire occurs, you can benefit from coverage for personal belongings, liability, temporary housing, and minor medical expenses.

When shopping for renters insurance, you should consider potential policies’ coverage limits, deductibles, and other factors to ensure you purchase the one right for you. With proper research and shopping around, you can settle on a policy that prevents coverage gaps and gives you peace of mind if a fire occurs.