Fire insurance claims: When to tell your home insurance provider

“You don’t have to file a home insurance claim if you have a house fire,” is not something you would expect to hear from insurance experts. But in the wake of the increasing fire-related fatality numbers from the Ontario Fire Marshal, we couldn’t help but ask.

First, the numbers. Between January 1 and May 4, 2020, there were 51 fire-related fatalities in Ontario—a 65% increase in comparison to the same timeframe last year. However, insurance specialists in the province aren’t reporting a surge in claims.

Now, if house-fire fatalities are up and residential fires in general are a growing concern during the pandemic, it’s reasonable to consider that some Canadians aren’t making insurance claims after a house fire—presumably because they want to avoid a potential rate increase.

Should you make an insurance claim for a house fire? Well, it depends

When an injury or fatality occurs, it’s critical that all relevant reports are made. However, if a house fire results in property damage only, you may consider handling the repairs privately. This isn’t necessarily a bad idea, according to insurance broker Peter John Van Dyk, PV&V Insurance Centre in Burlington and Meester Insurance Centre in Smithville. As long as you get a proper damage assessment and arrange for professional restoration. This is not the time for a DIY job, he emphasizes.

There are times when it makes sense not to file a claim, the broker asserts—namely, when the damage is minor and a claim could negatively impact your rate or disqualify you from a discount. If you need to carry a higher deductible in order to have an affordable monthly premium, Van Dyk suggests making insurance claims for larger occurrences only. “Carry the deductible you can afford and save on the premium,” he says.

Not all brokers feel this way, and Van Dyk reiterates that a proper assessment and restoration job is absolutely necessary, whether you make an insurance claim or not. He often refers clients to trusted contractors in their region.

Not so fast: Making a fire claim can be worth it

Scott Robert Hawryliw, of SRH Litigation in Barrie, is a lawyer whose area of expertise includes uninsured claims. He suggests that after a house fire or other property damage, homeowners should contact their insurance company immediately to initiate a claim and not begin repairs on their own. Noting that individuals often take a “let’s see how it goes” approach to fixing property damage, this can backfire. “You cannot report the claim later if your repairs aren’t working out as planned.”

And when fire is involved, so is water—something that can lead to serious issues down the road. “If you had a fire that was put out using a firehose, you also have a serious flood,” Hawryliw notes. “The water damage might even be a bigger issue than the fire damage. The good news is that the water damage from putting out the fire should be included in the same claim.”

What’s covered for a fire and what’s not

It’s also important to know what’s covered under your home insurance, and what’s not. “Many people think their home insurance claim will result in the insurance company fixing everything related to this problem,” Hawryliw says. “Normally, an insurance policy only covers the repairs that are a result of the fire or the flood. It does not cover fixing the cause.” For example, faulty wiring that caused a fire may not be fixed as part of a house insurance claim; if it stemmed from a lack of maintenance, you could be on the hook for the cost of correcting the issue.

In some cases, fire damage happens to a rental property—something that can create a problem for landlords and tenants alike. “If you are a landlord, you might also have the right to look to your tenant to repair the damage that they caused rather than making a claim against your insurance policy,” Hawryliw explains. “If your tenant has renters insurance, getting this looked after should be fairly straightforward. If not, you can elect to sue them for the damage or claim against your own insurance. Just be aware that it might be hard to collect on a judgement obtained against your tenant.”

Another way to avoid fire claims

Bertie the Beaver, Canada’s answer to Smokey the Bear, would agree that preventing fires is the smartest way to avoid making any house fire insurance claims. So, the best way to avoid the physical, emotional and financial impact of a house fire to practice fire safety in your home and backyard.

Be sure that all smoke detectors are in proper working condition (you should have one on every level of your home, especially near sleeping areas) and have a fire exit plan. Remain present and alert while cooking, use appliances properly and avoid open fires in your backyard. If you smoke, avoid doing so near flammable materials such as mattresses, and properly dispose of all cigarettes. Clean your dryer’s lint trap regularly, don’t leave candles unsupervised and keep a fire extinguisher handy for emergencies. Finally, don’t microwave your face masks: this doesn’t properly sanitize them, and can also cause a fire.

These small precautions can make all the difference not only to your pocketbook but to your health and safety—something few of us now take for granted.

MORE ON HOME INSURANCE:

• Did you know your car has fire insurance coverage?
• The real cost of home insurance claims
• Yes, your home insurer can sue you—here’s why

About Erin Pepler

Erin Pepler is a freelance writer based in the Toronto area. A frequent contributor to MoneySense, she is also the author of Send Me Into The Woods Alone: Essays on Motherhood.