Fire Insurance Claim Calculation Guide: How Much is My Fire Damage Claim Worth?

Posted on February 28, 2024


Hayden Haskins | author

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ICHQ | Site Author

Housefires are dangerous, and escaping without serious injuries or loss of life is the number-one concern. However, even when everyone gets out safely, fires can be devastating. The last thing people want to worry about after such a disaster is the cost of rebuilding their home.

Fire insurance can be a lifesaver, but fire insurance claim calculation isn’t always as straightforward as it seems. Insurance companies sometimes take advantage of this to reduce their costs. If that happens, you may need the help of the experienced team of fire damage claim attorneys at Insurance Claim HQ.

What Is an Average Fire Insurance Claim Calculation, and What Determines the Total?

An average house fire claim ranges from $50,000 to $100,000. However, individual claims vary depending on a variety of factors.

Type of damage

You may have costs to repair burnt or melted materials and soot and smoke damage. Additionally, the water and chemicals firefighters use to combat fires can cause damage to your property. There will also be additional expenses to clean up and remove debris and sanitize your home.

Severity of damage

A claim for a mild fire that involves soot and smoke remediation could average about $25,000. A moderate fire that requires water damage restoration, sanitization for multiple rooms, and removal of burnt materials averages a cost of $75,000. A severe fire that may result in a total loss or require structural repairs and chemical cleanup can cost $250,000 or more, depending on the value of the home.

Size of the home

Cleanup costs range from $5 to $10 per square foot. The bigger your home is, the higher your fire insurance claim calculation will be.

Insurance policy

Most fire insurance pays to repair or replace structures and personal possessions damaged by a fire. Many policies also pay related costs, such as the cost to stay in a hotel or rent a home until you can return to your fire-damaged home.

Some insurance policies cover your damaged property at replacement value, while others cover it at actual cash value. If you have replacement value coverage, the insurance company must pay the cost to repair or replace your property at the current market rate.

If you have actual cash value coverage, the insurance company will take a depreciation deduction based on the age of the property and its estimated useful life. Some insurance policies may pay less than the full amount of your claim if you choose not to rebuild your home.

Most policies exclude coverage for some types of property. Cash, deeds, and securities are examples of common exclusions. Your insurance will not pay for damage to excluded property.

Value of your property and your coverage limits

In most cases, the maximum amount of your fire insurance claim calculation is the lower of the value of your home and damaged possessions or the limits of your policy. If your home is unrepairable due to structural damage or the cost to repair it exceeds its value, the insurance company will settle your claim as a total loss.

For all other losses, the value of your claim is the cost to repair or replace your damaged property. Your insurance company will estimate the value of your claim based on an inspection by the claims adjuster and any supporting documentation you can provide.

Cause of the fire

Some insurance policies do not cover fire damage that the negligent actions of any person listed on the policy caused. Most insurance policies cover fire damage due to arson unless someone listed on the policy set the fire.

Whether you have a mortgage

If you have a mortgage on your home, the insurance company will typically pay the mortgage company first and then you will get a check for the remaining balance. If you have a mortgage company listed on your policy but you no longer have the mortgage, get your mortgage company to verify it no longer has an interest so the insurance company can pay you directly.

What Can You Do When the Insurance Company’s Fire Insurance Claim Calculation Is Lower Than Yours?

It is common for insurance company estimates to be less than the actual cost to repair or replace a fire-damaged home. Sometimes disputes arise because the insurance company claims the damage is not as extensive as the policyholder says it is, or that the fire was not the cause of some of the damage.

Disputes may also arise over the market value of the damaged property, the cost to repair or replace it, coverage issues or the appropriate amount of depreciation. If you don’t agree with the settlement your insurance company offered, you do not have to accept it. You have the right to hire a fire damage claim attorney to estimate the value of your claim based on an assessment of your damage and the value of your property.

How Can You Maximize Compensation for Your Fire Damage Claim?

It is important to take steps to ensure you get the full compensation you deserve for your claim.

Notify the insurance company as soon as possible

The longer you wait to file your claim, the longer it will take for you to get your house fire insurance payout. Additionally, waiting can make it difficult to accurately assess your damages. File your claim as soon as possible.

Make an inventory of your lost property

It can be easy for the adjuster to miss items without a detailed list. Make a list of all your damaged property before the adjuster comes to your house. Don’t throw anything out. If the adjuster does miss something, it will be easier to prove if you still have the item.

Gather evidence of your damages and expenses

Taking photos of your damaged property is important for your claim. Consider hiring a public adjuster to get an unbiased opinion of the value of your claim. Keep receipts for all of your fire-related expenses.

Get Help With Your Fire Insurance Claim Calculation

Insurance companies deal with fire claims every day and may try to take advantage of your lack of experience. The experienced attorneys at Insurance Claim HQ know how to estimate fire damage costs.

We will help you with your fire insurance claim calculation and gather the evidence necessary to prove the value of your claim to the insurance company or the court. Contact our firm to speak to a fire damage claim lawyer. Use our online form to schedule a free consultation.