Fire Insurance and Your Premiums

Fire Insurance is really where home owners insurance started. It is the scariest threat, and the one most likely to claim a life.

Fire is the big risk people think of when it comes to houses, and for a good reason. Mankind has a history of building great cities just to see them go up in flames. Homes these days are built with an eye toward reducing the risk of a fire, and yet we still see hundreds of homes destroyed every year.

In 2011 the fire department got called out to 370,000 household fires. 2,520 people died in these fires. And that is just in the United States. Throw in Belgium and Luxemburg and the numbers get larger.

Cooking Fires

42% of these fires started in the kitchen, which gives you an idea how dangerous cooking can be. Our fire insurance rates would be lower if we would just quite cooking in our homes.

Homes often used to have kitchens in separate outbuildings, especially in the South, where the heat from the oven wasn’t such a valuable commodity. They put the kitchens in a separate building so they wouldn’t lose their home to an out-of-control cooking fire.

Perhaps we need to revive that custom. Instead the modern trend is to have the kitchen open to the surrounding rooms so that everyone can watch dad burn the plastic pacifiers he was sterilizing.

Okay, that was not me, but certain people read my articles, on occasion. There are many risks in this world and an angry cook with sharp knives and access to poison is one of them. Fire insurance will not cover either of those.

Smoking-Related Fires

According to the National Fire Protection Association smoking is the leading cause of fire deaths.

My grandfather used to manufacture a glass safety ashtray. People balance a cigarette on the edge of an ashtray, but after it burns down to a certain point it is no longer balanced and the butt and the ember fall off the ashtray and onto the carpeting.

His ashtray prevented this, but an even better idea is not to smoke at all. Many insurance companies provide premium discounts for non-smokers. What they are really saying is that fire insurance costs more for smokers, as it should.

Electrical Fires

In 2011 43,700 fires were the result of an electrical failure of some type. Half of those involved electrical distribution or lighting, meaning the cause of the fire was wired into your house. The remainder came from some kind of appliance, such as a space heater, or a dryer.

We had a close call once. A dishwasher had a heating element that warped. If got dangerously close to the plastic tub and melted the tub. It could have easily caught fire. In this case we discovered that the dishwasher company was recalling that model for that very reason.

However, lest you fear for your life every time you use a device, appliances undergo rigorous testing, usually by an independent lab, such as Underwriter’s Laboratory. My work in the automotive field indirectly relates to warranties, so I know that rigorous testing alone will not prevent failures, but it does greatly reduce the likelihood of such a failure. However, the testing won’t pick up the type of errors made in the manufacturing process. Great design plus poor quality still results in warranty claims, and sometimes in electrical fires.

The half of electrical fires that are caused by electrical distribution or lighting devices are usually the result of faulty wiring. Either the wiring wasn’t up to code to start with or changes were made later that created a hazardous condition. In many cases it is simply a matter of age.

My house was built in 1906. The original wiring was a type called knob-and-tube, which was state-of-the-art in its day, but that art was not very safe. Many insurers will not provide fire insurance for houses that are still wired this way. Most of my knob-and-tube had been eliminated decades ago, but I did replace some that was still in my basement.

I have also encountered problems with very old switches failing from old age. Most fail in a way that creates no harm, but this is not always the case.

If you have an old home you might be able to save money by rewiring your house, but this is not an inexpensive proposition. However, if you are already planning a renovation it may make sense to include new wiring as part of that renovation. In some cities in order to get a permit to renovate a house you have to agree to upgrade the wiring.

Another risk from living in an old house is a paucity of outlets. We use a lot more appliances than our parents and their parents and need more outlets. Those of us who live in old house often extend the number by using extension cords with multiple outlets. This works great, but you run the risk of overloading the circuit or the cord and causing a fire. If you are going to do this make sure that you use a heavy duty cord.

To get a sense of how up-to-date your wiring is take a look at your main distribution panel. If you have circuit breakers then you know that at least that part of your wiring is relatively new. If you have fuses then we are talking a wiring system that is probably over 40 years old. That does not mean it is bad, but it is at least a little suspect.

Home Heating Fires

Not surprisingly heating your home is a dangerous activity. 53,600 fires were attributed to home heating in 2011. As such insurance companies often take an interest in what kind of heating system you have and its age. Some will not insure houses with antiquated heating systems. Other will not insure houses with wood stoves, or will raise your rates to cover the risk. Lots of houses have fireplaces and even if they are not used the mere fact your house has one can affect your fire insurance premiums.

When I was considering adding a wood furnace I called my insurance company to see what this would do to my fire insurance rates. I was surprised that it was not going to have an effect. Partly is was because it was going to be a furnace, tied into the duct system, rather than a wood stove, heating a local area. As we shall see, space heaters increase the risk.

I recently asked my insurance company to clarify why my fire insurance costs did not change when I added my wood furnace.  My agent explained that it was because I had two systems in place.  I still had my propane system, which I used as my backup.

Then he surprised me.  He said my rates would actually be $18 a year cheaper if I only had the wood furnace.  As he explained the propane furnace added more to my fire insurance costs than did the wood furnace.  I queried him why this would be and he said it was because the replacement cost of a propane furnace is greater. Evidently there are plenty of home heating fires where the principle damage is to the furnace itself.

I did not have the heart to explain that my wood furnace cost as much as my propane furnace.  Some things are better left unsaid.

This does illustrate that every insurance company has their own way of looking at things, including fire risks, and their own way of calculating fire insurance premiums.  It is what your insurance company says that counts, but it is also why you can sometimes save big by shopping around.

Chimneys

One-third of those home heating fires were a result of chimney or flue problems, primarily caused by lack of maintenance and creosote build-up.Most of these were related to wood-burning heating systems.

The smoke given off by a fire will remain a gas as long as it stays hot, but as it goes up the chimney it comes in contact with the walls of the flue, and even though these get quite warm, the are still cooler than the condensation point for some of the chemicals in the smoke. These chemicals condense onto the walls of the chimney. Some of this forms creosote, which has the unfortunate quality of being flammable.

Since the creosote is in the chimney this might seem like a safe bet. What better place to have a fire? However it can build up, especially in turns or joints in the flue and if you get a lot of it the resulting fire can be hot enough to overheat the chimney. The chimney gets super-hot in one spot and any flammable materials next to the outside of the chimney can catch fire.

The key to preventing this type of fire is to clean your chimneys regularly. For people like myself who heat with wood this means annually.

Another good idea is to use an efficient wood stove. Modern wood stoves sold in the U.S. are all relatively clean burning, but some more so than others. Wood furnaces are not as tightly regulated but they are starting to get tested. I am lucky enough to own a Kuuma wood furnace made by Llampa Manufacturing out of Tower, Minnesota. They make the most efficient furnaces on the market today.

If you are like me and you install a wood burning appliance into an existing home make sure you run your flues to comply with all building codes. This basically means you must have plenty of clearance away from any combustible surfaces and shield the flue properly.

Insulated flue pipe is best, double-walled pipe comes in second. Single-wall pipe is a distant third. Remember how creosote forms? Insulated flue pipe will keep the interior walls of the pipe nice and hot so that little or no condensate will form. Single wall pipe will not stay as hot and creosote will form.

Also, with insulated pipe you don’t need as much separation from combustible surfaces.

Do not do what my friend did. He ran a single-wall pipe through an exterior wall to an outside chimney. After having put about a $100,000 into renovating his house he watched it burn one winter night. His pipe lacked the appropriate clearance and insulation and the wall caught fire.

He was lucky.  Everyone survived and his fire insurance covered his poor choice of materials. You may not be so lucky.

Space Heaters

Another third of the home heating fires related to space heaters. This category covers any device that isn’t specifically designed to have its heat distributed through ducts or pipes. It covers portable electric heaters, but also most wood stoves. Of the fires attributed to this category, one-fourth happened because of a lack of clearance.

When you install a wood stove building codes will specify that a certain distance from the walls is required. That can be reduced if you have an approved insulation between the stove and the wall. However this clearance often results in the wood stove hogging up a lot of space in a room. People often cheat in a little, to free up space. Bad idea.

It isn’t just the walls that are a concern. Anything that can burn is in danger. Snuggling in the blankets in front of the fire might be comfortable and cozy, but if you leave the blanket too close to the stove it might get too hot. Keep a safe area clear around the stove and enforce this policy.

Portable stoves are especially dangerous, just because they get moved around and might eventually end up in a dangerous spot. Use these sparingly and under close supervision.

Preventing and Mitigating Fire Damage

There are lots of things that you can do to reduce your risk of fire, or to reduce the damage that will follow. Some of these will earn you a discount on your home owner’s insurance, or at least that portion that deals with fire insurance.

First of all, never have a fire.  Yes, past claims will affect your rates.  A fire here and a fire there and pretty soon your insurance company will get the idea that you are not a good risk.

So, with that in mind, anything that prevents a fire, or reduces the extent of the fire damage, will save you in the long run, even if it does not directly lower your rates today.

Fire and smoke alarms are always a good idea. Check with your insurance agent as to how you can qualify. You may need to have the smoke alarms hard-wired in to qualify for a discount. The discount probably will not cover the costs of such a system, but it will defray the costs.  For instance, if I were to install a complete, monitored home security system that covered both intrusion and fires it would only save me $30 a year in on a $900 annual premium. I don't know the portion of that attributable to fire insurance.

While alarms are readily available at hardware stores if you want to get a good look at all your options you might drop by www.sdfirealarms.co.uk.

Having a few fire extinguishers around is also a good idea. If you have a danger spot, such as a wood stove, keep one nearby, but also have few in other locations. You may not always be able to get to the fire extinguisher once a fire breaks out. There is no direct discount on your fire insurance, but it may prevent or reduce the size of a claim.

A fire suppression system is not usually found in the home. These are typically reserved for businesses and apartments, but such a system would reduce your rates. Unfortunately we live in an imperfect world and the sprinklers would create water damage, which can be as costly as fire damage.

Build with fire in mind. You may have a wood-framed house, but if you side it with brick or stone, or other Class A fire-rated materials, you should get a rate reduction for your fire insurance.

Of course you could also build with concrete and have a structure that is itself fireproof. This will cost more, but it will be solid and far less likely to suffer serious fire damage.

For instance I have aluminum siding.  If I had wood siding I would pay $30 more a year. I suspect stone or brick would save me even more, but you will need to talk to your insurance agent to determine which sidings can save you the most.

The Second Horseman of the Apocalypse

Fire insurance covers you for fire damage, but there are lots of other ways to destroy the value of your home.

Water damage can be a humdinger as well, and this is one I have personal experience with. Read more when I talk about water damage insurance.

To Top of Page - Fire Insurance and Your Home

To First Page in Series - Factors Affecting Home Insurance Rates

To Second Page - Home Owners Insurance and Liability Insurance

To My Great Dane Story

To Third Page - Home Insurance and Your Personal Property Insurance

To Fourth Page - Fire Insurance and Your Home

To Fifth Page - Water Damage Insurance

To Sixth Page - Natural Disasters

To Seventh Page - Man and Thieves and Property Insurance

Home - House Design