Most people assume “fire insurance” means their home is protected if it burns. That is true, but what else the policy covers can vary a lot. In California, where more homeowners are ending up on narrower policies, the difference matters more than ever.

What is fire insurance?

Fire insurance helps pay to repair or rebuild property damaged by fire. It comes in two main forms.

A standard homeowners policy includes fire protection along with many other coverages. A standalone fire policy, such as a dwelling fire policy, is narrower and built around a short list of perils.

What does a fire policy typically cover?

Wildfire damage generally falls under the fire peril. Terms, limits, and deductibles vary by policy.

What does a fire only policy often leave out?

Liability if a guest is injured on your property
Theft
Water damage, such as a burst pipe
Temporary living costs, which may be limited or not included

Earthquake and flood are excluded from standard homeowners policies too, and each needs its own coverage.

Who ends up with fire only coverage?

Landlords and owners of vacant or seasonal homes, often through dwelling fire policies
Homeowners who cannot find a standard policy and turn to the California FAIR Plan, the state’s insurer of last resort for basic fire coverage

In the Bay Area, older homes and some dense neighborhoods have faced tighter underwriting, and some insurers have reduced or paused new homeowners policies in parts of California. That is why more homeowners are asking about fire only options.

What is the California FAIR Plan?

The FAIR Plan is a pool of California’s licensed insurers that offers basic fire coverage when standard coverage is unavailable. It is not a state agency.

Its basic policy covers fire, lightning, smoke, and internal explosion. It is not a full homeowners package.

How can you close the gaps?

A difference in conditions policy, often called a DIC policy, can be paired with a fire only policy, including a FAIR Plan policy, to add protection such as liability and theft. The California Department of Insurance has noted that DIC policies can be combined with fire only policies to provide protection comparable to a standard homeowners policy.

Availability and terms vary by property and carrier, so ask your agent which options fit.

What should you check on your own policy?

Which perils are listed, and which are not
Whether your dwelling limit still covers current rebuilding costs
Whether liability, theft, and water damage are included or need separate coverage
How temporary living expenses are handled after a covered fire
Whether your property type, such as a rental, vacant home, or second home, needs a different form

Frequently asked questions

Is fire insurance required in California?
Not by state law for most homeowners, but a mortgage lender will typically require coverage that includes fire.

Does fire insurance cover wildfire?
Generally yes. Wildfire is treated as fire under most policies, subject to the policy’s terms, limits, and any wildfire specific deductible.

Is a dwelling fire policy the same as homeowners insurance?
No. Dwelling fire policies are usually for properties you do not live in, such as rentals and vacant homes, and they are narrower. Homeowners policies are for owner occupied homes and include liability and personal property coverage.

Does fire insurance cover my belongings?
It depends on the policy. Some fire policies cover the structure only, so check whether personal property is included.

Does fire insurance cover a business?
Commercial fire insurance is built for that. April’s Commercial Fire page describes property, business interruption, and liability options.

At April Insurance Agency, we help Bay Area property owners review what their fire coverage includes and spot the gaps. Reach out to April Insurance Agency to review your options.
Call 415-242-8100 to get started.