The majority of fire insurance policies cover fires that start inside or outside the house. The extent of the coverage is influenced by the nature of the fire.
Damages are covered by the policy in accordance with either the actual cash value (ACV) or the replacement cost method.
The insurance company may pay out the home’s current market value if it is deemed a total loss.
For lost possessions, insurance typically compensates at market value, with a maximum payout capped at the home’s total value.
For instance, if a policy insures a house for $350,000, the contents typically receive coverage for between $175,000 and $245,000.
Luxury items like paintings, gold, fur coats, and jewelry are subject to reimbursement caps in many policies.
