Fires are the number one cause contributing to the total loss of a person's residential or commercial property. This can be a devastating occurrence as not only is the building destroyed, but all clothing, furniture, tools, and business equipment is as well. Homeowners, renters, and business owners are all encouraged to purchase insurance that will protect them from the financial burdens associated with fire damage.

This insurance coverage will not only cover damages directly caused by the fire, but it will also compensate for indirect losses. For example, if a fire damages a wall in the home and this allows rain to destroy a computer or other electronic device, then this will also be covered.

Fire insurance can be a broad and extensive policy. It isn't limited to damages caused by fire alone. You can also purchase a comprehensive policy which will protect you against theft, vandalism, riot, windstorm or hail, and impact by aircraft or land vehicle.

This coverage will pay to repair or rebuild your home as well as replace your personal belongings. If the damage is so extensive that you need to relocate to an alternate residence while awaiting repairs, you will also receive additional living expenses. This will allow you to live within the same standard of living that you were accustomed to before the incident. Debris removal and clean up is usually also included.

Insurance companies use different methods to determine the premiums for fire insurance; as they do when calculating auto rates. The proximity to fire hydrants and fire stations is taken into consideration. This determines the "protection factor" of the location. Of course, the closer the residence or business is to both, the more protected it is considered. It will take less time for the fire department to reach the location and thus, less damage is likely to occur.

The materials the building is constructed from also plays a part in determining the premium for fire insurance. A building made of concrete is less likely to sustain damage than a home built out of wood. Wood shingles are more flammable than slate or Spanish tile. These homes are less expensive to insure.

This is also true when you take the age and condition of a home into consideration. Older homes may not always be up to code and the wiring can be faulty. This makes them more susceptible to fires and damage. If residents keep their home in a state of disrepair, then they are at a higher risk of having to make a claim. Unsightly debris or garbage that collects can be a potential fire hazard.

The number of units and people who reside in a building can also impact the rates. A four-plex offers a higher risk of fire than a one family home. A strip mall containing a handful of businesses presents more of a hazard than a stand alone building. This is because there are more residents and higher traffic.

It is important to work with an agency that you can trust to review all of the factors and procedures relating to fire insurance.