Insurance is intended to protect the insurance company customer (“insured”) from fire damage. The policy holder pays the premium for fire insurance. If the property catches fire, the insurance pays for the losses. Obviously, the customer cannot commit arson. Intentionally burning your house or property is a crime. It is also illegal to present a fraudulent insurance claim. No law abiding citizen approves of either arson or insurance fraud.

According to Allstate, fires cause serious damage. The insurer reports the number of fires in this country destroy homes and lives:

Your house is probably the most valuable asset you have, and you have homeowners insurance to help protect you and your house in case something unfortunate, such as a fire, should happen. From electrical issues to candle mishaps, the National Fire Protection association reports an average of 357,000 residential fires each year.

Since homes are usually the most expensive asset owned, people understand the need to buy insurance coverage. Banks typically require an insurance policy for the loan. The mortgage is still owed even if the house burns down. Realizing the average family would not be able to pay off the loan, insurance is required by lenders.

The typical Allstate Insurance policy provides coverage for the house. The insurance for the house is called dwelling coverage:

Dwelling coverage, sometimes called “dwelling insurance,” is the part of your homeowners insurance policy that helps to pay for the rebuilding or the repair of the physical structure of your home if it’s damaged by a covered hazard. As you probably already know, there are a number of hazards that are not covered by many homeowners insurance policies. But, the good news is that the average homeowners insurance policy typically provides coverage for a pretty comprehensive list of potential incidents, both natural and manmade.

The part of the insurance that protects the stuff inside the home is called contents coverage. Like most insurance companies, Allstate’s policy covers personal belongings:

Homeowners coverage usually extends to your personal belongings, such as appliances, furniture and clothing. Homeowners insurance typically helps protect personal belongings, from specific risks (described in most policies as “perils”), such as fire and lightning strikes. If your belongings are damaged or destroyed in a fire, homeowners insurance may help cover the loss.

A standard homeowners’ policy sometimes insures trees and bushes in the event of a fire. The homeowner can be reimbursed for some or all of their value if destroyed in a fire. Compared to human life, the cost to replace some trees is not significant. But, many homes have thousands of dollars invested in landscaping that fire destroys.

Is there enough coverage? The question is asked often. When someone asks about the amount of coverage before a fire, it is considered good judgment. The question of “am I covered” also comes up after a fire. The normal property owner usually doesn’t know what coverage they have. Finding out after a fire can be painful.

Insurance policies have limits or maximums. Some folks just assume they have “full coverage”. After the fire claim is reported, they find out differently. The policy has exclusions, ceilings, and doesn’t cover everything. Most insurance policies have maximum amounts set for guns, jewelry, glass or crystal, furs, and other things. Computer and electronic equipment usually have limits of coverage.

Fire claims are different from storm losses. A tornado is hard to fake. On the other hand, fires can be started intentionally. Insurance adjusters look for signs of fraud or arson. The adjuster has two jobs in a fire claim. The adjuster protects the insurance company against fraud. The adjuster pays an innocent customer for the damage from the fire. Simple enough, right?

Circumstances can raise “red flags” with experienced adjusters. A “red flag” is something out of the ordinary. It can be an indication that insurance fraud is present. For example, being behind on the monthly bills is a red flag in some cases. The facts have to be looked at. A person with past due bills might have a reason to burn their house. The adjuster needs to be fair in assessing the facts. Many people have financial problems from time to time. Just being unable to pay bills doesn’t prove arson. However, being behind on payments can suggest a motive.

If the property owner is 3 – 4 months past due with the bank, it may indicate a reason for setting the fire. A home with a lot of equity presents an interesting question for a claim representative. The adjuster has to decide, did the customer burn the home to get the money back? A home with no equity raises a different question. Was the house burned because it could not be sold?

The biggest mistake made in fire claims is not getting an attorney involved early. Smart insurance companies retain a competent insurance lawyer early in the claim. It can be helpful in some claims for the homeowner to have a lawyer. But, not a brother-in-law whose law practice is largely divorce cases. The insured needs experienced legal counsel just like the insurance company. If the insured doesn’t trust the insurance company, an experienced attorney can confirm that a settlement is fair.

If the insured homeowner chooses not to consult with an attorney, good communication becomes very important. Homeowners may not understand the process of adjusting a claim. Insureds may express frustration over the need to document the actual damages. It is important to remember the policyholder is understandably upset by the fire. A legitimate claim for loss of everything you own is a huge blow. Good communication keeps everyone working together to resolve and settle the claim quickly.

Our legal team is licensed in all Oklahoma State and Federal courts. We have decades of experience in insurance, fire claims, construction litigation, insurance coverage, examinations under oath, and settling insurance claims. If we can help you, call us 918-587-1525.