My car caught fire and burned. Will my home insurance cover this damage?
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Asked February 26, 2014
One of the few pieces of personal property that is not covered in home insurance is your car. For a majority of things which could happen to your vehicle, in your driveway or even in your garage, your car insurance will be the policy which handles the claim. There are some exceptions to this rule, and a house fire is one of them, but it should always be your car insurance you check first when the car is damaged.
If the car is the only thing that burned, your car insurance is your only option. You still have to pay the deductible, and the limits on your policy may not be sufficient to pay for the full repair or replacement unless your policy is a Full Replacement Cost policy. By default, most insurance policies are Actual Cash Value policies, and will only pay a depreciated amount towards the repair or replacement of the car. Full replacement Cost will add a small amount to your premiums, but it can save you thousands in out of pocket expenses.
If your home burns down and the car, for whatever reason, is set on fire by the burning house, it may be covered by your homeowner's policy. You should still consult the car insurance company first, but the home policy may be the one which settles a claim, based on the concept that the house fire caused the car to burn, and is therefore the responsible party. If possible, it would work out best for you to file the loss on your auto insurance.
There is a good financial reason that you should not file a burned car as a home insurance claim. Since the policy could only treat the vehicle as personal property, then the cost of repairing or replacing the car would be added to the total personal property loss on the home. The personal property limits in home insurance is typically only a small portion of the value of the policy, and most families exceed those limits with their household property. Adding the value of a car to your homeowners claim would only reduce the amount available for replacing other burned items.
Answered February 26, 2014 by Anonymous