What Is Dwelling Fire Insurance?

Dwelling fire coverage is often selected for rental or non-owner occupancy (as an example, a homeowner who, for free, has arranged for a friend to use his home for an extended period). Other situations that may call for use of dwelling fire coverage are lack of full-time occupancy (secondary or seasonal homes) and type of property (mobile homes and minimal value manufactured homes). Another very common situation that is handled by dwelling fire coverage is residences that are under construction.

There are other reasons for writing a dwelling policy. Some residential property may be obsolete. Such may be the case for a very old, well-maintained home that has a high market value. However, the home's structural features (ornate scrollwork; custom, old fashioned flooring; old, non-standard cabinetry; stairwells; etc.) may make it impractical to cover under a replacement cost, homeowners contract. Losses under dwelling fire policies are usually paid on either an actual cash value or a repair cost basis. The former is used for total losses and the latter for partial losses (except when the cost to make repairs exceeds the damage property's actual cash value).

The earliest version of the Dwelling Fire Policy protected dwellings and personal property against loss from a handful of perils (typically fire, explosion, smoke, vandalism and wind). Protection is now much broader, rivaling the coverage available under Homeowner Program forms. Dwelling Fire coverage can be written under a Basic, Broad or Special Coverage form, protecting dwellings, other structures (sheds, unattached garages, barns, pagodas, greenhouses, etc.) and/or personal property. The historical difference between homeowners and dwelling fire policies was that the latter only included property coverage. However, for a number of years, insurers have offered the option of adding premises liability protection and medical payments coverage for minor injuries to third parties.

In any case, the dwelling fire program is quite viable due to it's availability to handle classes of property that is avoided by the underwriting and marketing parameters of most insurers' homeowners programs. If you have property that may need consideration for dwelling fire coverage, discuss the need with an insurance professional.