Difference Between Fire Insurance and Home Insurance (With Table)

Fire Insurance vs Home Insurance

The difference between Fire Insurance and Home Insurance is, Fire insurance compensates for damage caused by fire, lighting, Thunder and Smoke. Which happens only due to fire. While, Home insurance covers damages due to natural calamity, Manmade Disasters, Fire, and burglary and others.

Insurance is a legal agreement between two parties. i.e. Insurance company (Insurer) and Individuals (Insured). It is also Protection from financial loss or reimbursement.

The insurance company takes this risk of providing a high cover for a small premium because very few insured people end up claiming the insurance. Therefore, get insurance for a big amount at a low price.

Life Insurance and General Insurance are mainly two types of Insurance. The Insured gets the compensation only when the loss is caused to him or her, it is also called as non-life Insurance. It is classified into subcategories and Fire Insurance and Home Insurance are part of this.

If there is a fire accident and it damages the property, then it can be claimed using fire insurance. The repair expense and reconstruction expense is also covered in fire insurance. It also covers the damages caused to third-party property or livelihood surrounding due to fire.

Any natural or manmade disaster to the home property can be claimed using Home Insurance. It offers financial security to the property and also covers the liabilities inside the house.


 

Comparison Table Between Fire Insurance and Home Insurance (in Tabular Form)

Parameter of ComparisonFire InsuranceHome Insurance
Compensation Covers damages due to fire, lighting, Thunder and smoke.Covers Damages due to natural calamity, Manmade Disasters, Fire, Burglary and threat.
ExclusionsExclusions are not specifically stated. They are only listed in the standard policyIt includes general and special exclusion. For example, property under construction / renovation and radiation so on.
Insured ObjectMostly used for the protection of private property. Such as Home, Apartment.It is used for commercial or industrial insured objects such as office buildings, factories, hospitals, or modern market buildings.
Premium RateThe premium rate offered is lower and must comply with the regulations set by the insurance agency.Compare to Fire insurance, this is slightly higher in rate
PayoutFire insurance offers payouts only to Structurally damaged when you purchased property. Like pipes, floor and walls so on.Home insurance offers payout not only to structurally damaged but also things are added after purchase

 

What is Fire Insurance?

Damages caused by the fire is covered by Fire Insurance. While there are a few home insurance policies have coverage for damages due to fire, it is advised by the financial experts to get fire insurance separately if there are valuable items at home.

In simple words, fire insurance provides money for any damage caused by fire. Any smoke or water damage due to fire is also covered in fire insurance.

While buying a fire insurance policy it is advised to give a proper account of the possession. Because as per the location addresses in the document of the policy, the claim will be settled. In case any unfortunate events occur at the insured place, if changes are not brought into the notice of the insurer then its loss to the insurer.

Fire insurance does not cover for any damage or loss due to electrical machines, short circuit, leakage of electricity and to the stock due to change in temperature. Directly or indirectly by some of the natural disasters like earthquake, flood creates any damage is also not covered. It can be added on to the policies for earthquake and flood etc. upon paying extra premium.

 The essential condition to be able to claim fire insurance is, there must be an actual fire in the insured premises. And the fire must have caused only due to an accident which has caused the damage that cannot be borne by the policyholder.

The damage by heat or fire, if not accidental, won’t be considered as loss due to fire. Hence, insurance is not applicable in such instances.

The claim against any insurance policy includes details about the loss suffered, submission of bills, proof of damage, loss etc. later the insurance company would verify the claim of Insured then reimburse for the loss.

Fire Insurance
 

What is Home Insurance?

The property insurance that covers the damages or losses due to natural or man-made disasters that have inflicted on the property is called home insurance Any accident in the property that belongs to the house is also covered in the home insurance.

Four kinds of incidents are covered by the home insurance; damage to the interior part of the house, exterior damage, damage or loss of personal belongings or property connected objects, and also injury while being in the property.

Standard home insurance policies do not cover any disasters like earthquakes or floods. Special coverage insurance must be taken, if the property is in floods or earthquake disaster-prone areas.

Home warranty and home insurance are not the same. Where a home warranty is provided to home systems or appliances for repairs and replacement. Home insurance covers damage due to different aspects.

Home Insurance premium normally includes the size of home or property, type of coverage plan, age of home, building, factory and systems installed in, Location of home and property and sun assured. Based on these the premium amount calculation will be made and it differs from one agency to other insurance agency.

Home insurance is important as it protects the home from different types of damages, even the minor damages also include. For examples, if the roof gets damaged due to wind, storm and leakage of roof or walls.

Home Insurance

Main Differences Between Fire Insurance and Home Insurance

  • The main difference between Fire Insurance and Home Insurance is, fire insurance covers the damage caused due to fire, lightning and explosion. Whereas Home insurance covers damages due to natural calamity, Man-made Disasters, Fire, and burglary, threat and other
  • Fire insurance is used for protection over private properties such as a house, apartment. Whereas, Home Insurance is generally used for commercial buildings.
  •  The fire insurance premium is not only lower and but also differ from agency to agency. While Home insurance premium is slightly higher than the fire insurance.
  •  Fire insurance offers a payout if the home is structurally damaged like walls, floors and pipes etc. Whereas Home insurance deals with the payouts for the content of house or property which are not part of the structure and also added to the home after purchase such as furniture, appliance even personal items.
  •  Fire insurance only includes the coverage for loss due to fire. Whereas The home insurance policy can also help cover damages due to fire by paying extra premium. Whereas fire insurance only includes the coverage for loss due to fire.

 

Conclusion

Earlier it was only cared about protecting homes against fire because that was considered to be the most devastating loss they incurred. Today there are many different threats to the property and life including natural disaster and manmade disaster, so the policies have improved to protect against them.

A correct choice for the property can be made by knowing the difference between the two. As seen, Home insurance policies can include quite a diverse mix of items and also vary considerably in premium and the level of coverage. It is thus important to take the time to compare policies before deciding which one would best suit the needs.

Fire and home insurance do not cover damage caused by an act of war. It is always suggested to read the policy before signing. Having smoke detectors and fire extinguishers at home are certainly a smart way to help protect from fire. But, if a fire damages to home or property, home and fire insurance may help, and family recover financially.


 

Word Cloud for Difference Between Fire Insurance and Home Insurance

The following is a collection of the most used terms in this article on Fire Insurance and Home Insurance. This should help in recalling related terms as used in this article at a later stage for you.

Difference Between Fire Insurance and Home Insurance