What Happens When Your House Burns Down?

house fire

Picture this: you are driving through your neighborhood when you suddenly are deafened by the sound of sirens. As you approach your house you  start to see crowds, flashing lights, and finally…the glow of an uncontrollable fire engulfing your home. Your house is on fire. Scary, right? But even though it seems like it could never happen to you, according to the National Fire Protection Agency (NFPA), there were 365,500 house fires in 2015.

So what happens to a person after they lose their home in a house fire?

Homeowner’s insurance gives residents peace of mind that in the event of a catastrophe like a house fire that they are able to quickly walk away from their loses financially sound. However, it’s not as cut-and-dry as just losing your house and getting a check for damages the next day.

Here’s what happens when your house burns down:

1. You Talk to Your Agent

The first thing you need to do when your house gets destroyed or damaged in a catastrophe like a fire is call your insurance agent. (By first, I mean immediately. As you stand there in your fuzzy, bunny slippers on the front lawn watching your worldly possessions turn to ash, you need to call them.) Your agent should be trained not only to give you the advice on what to do from there, but to also help you in your fragile emotional state.

2. Get Interim Housing

When a person’s home either burns down entirely or is unlivable, their loss of use or additional living expense insurance policy will help you rent a place comparable to your housing situation prior to the fire. For instance, a person who lost their luxurious estate is going to get compensated with more than Joe whose one-bedroom bungalow burned to the ground. You also will get assistance with meals and other services.

3. Wait for Financial Reimbursement

Your insurance policy’s homeowner dwelling policy covers your home’s mortgage after a fire. But, it’s not a perfect system. If you are still paying off your home, the bank gets paid before you do. You get whatever money is left from that. The money you get from that is then what you can use to either fix a damaged home or to put toward a new one.

Pro tip: The replacement value of your home is what your insurance policy valued it at when you bought it. That means that if you did things to increase the value of your home and you did not have a property reassessment, you could lose out on a lot of money.

4. Replace Your Personal Possessions

Finally, your personal property coverage will cover part of your home value for things like clothes, furniture and appliances. So if your home is worth $200,000, you can get $100,00 to replace all your stuff if you have a 50% personal coverage plan. You might also have it either broken into replacement value or cash value. Cash value is the current value of an item and replacement cost would be getting whatever the price you paid for it when it was bought.

Pro tip: Keeping inventory of your belongings is the safest way to replace items after a fire. You can hire people to do this or do it yourself.


The Best Defense Against a House Fire

There’s no way to guarantee your home won’t get struck by lightning tomorrow. But, there is a way to make sure you will be prepared financially if it does. Contact an agent who can review your current homeowner’s policy and adjust it accordingly.