Standard homeowner’s insurance covers most fire damage — but not all of it, and the gaps matter. Your policy covers sudden and accidental fire losses, including fire, smoke, and firefighting water damage. It does not cover fire losses from specific excluded causes, damage that exceeds your coverage limits, or code upgrades required in reconstruction unless you have specific endorsements for those items. Understanding what’s covered and what isn’t before you have a fire — and reviewing your policy with an agent to close any gaps — is significantly better than discovering coverage gaps after a loss. It’s essential to ask yourself, will insurance cover fire damage?
After nearly 30 years of fire damage restoration in Lakewood, Pine, Conifer, Evergreen, Bailey, and the surrounding mountain communities, the most common coverage surprises I’ve seen come from three sources: coverage limits that haven’t kept up with construction costs, missing ordinance and law coverage, and personal property coverage on an actual cash value basis rather than replacement cost. Each of these is preventable with a policy review.
Call 303-816-0068 immediately after a fire. We work directly with your adjuster and help you understand what your policy provides throughout the claims process.
What Standard Homeowner’s Insurance Covers
A standard HO-3 homeowner’s policy — the most common type — covers fire damage under an open-perils basis for the dwelling. That means fire damage is covered unless it’s specifically excluded. The coverage components for a fire loss are:
Dwelling coverage (Coverage A) — the structure itself, including attached structures. This is the coverage that pays for fire, smoke, and water damage restoration and reconstruction of the building.
Other structures (Coverage B) — detached garages, fences, and separate structures on the property. Usually 10 percent of dwelling coverage.
Personal property (Coverage C) — contents, furniture, clothing, electronics, and personal belongings. Standard coverage is typically 50 to 70 percent of dwelling coverage. Whether this is actual cash value or replacement cost depends on how your policy is written — an important distinction covered below.
Additional living expenses (Coverage D/ALE) — temporary housing and increased living costs while the home is uninhabitable. Standard coverage is 20 to 30 percent of dwelling coverage.
Liability coverage — not relevant to a fire damage claim but part of the policy.
What Standard Policies Don’t Cover
Intentional fires — fires set intentionally by the policyholder are not covered. This is an exclusion that creates no coverage for arson by the insured.
Vacant property — properties that have been vacant for more than 30 to 60 days (depending on the policy) may have coverage limitations or exclusions for certain losses including fire. Mountain vacation properties in Pine, Conifer, Evergreen, and Bailey that are vacant for extended periods need attention to this provision. Vacant home endorsements or separate vacant property policies are available and worth having if a property is regularly unoccupied.
Business property and business interruption — standard homeowner’s policies have limited coverage for business property and don’t cover business interruption losses. Home-based business owners who have equipment, inventory, or other business property at the residence may need a business endorsement or separate business policy.
Certain high-value items — jewelry, fine art, antiques, collectibles, and other high-value items have per-item and category limits under standard personal property coverage. A $5,000 jewelry limit is common on standard policies. If you have valuable jewelry, art, or collectibles, a scheduled personal property endorsement provides agreed-value coverage for specific items.
The Coverage Limit Problem — And It’s Common
This is the coverage gap that surprises families most after a major fire loss. Your dwelling coverage limit was set when you purchased the policy or last reviewed it. If construction costs have increased significantly since then — and they have over the past several years — your coverage limit may not be enough to fully rebuild the structure.
A common thing seen in the industry is insurance settlements that cover restoration and reconstruction but leave a gap between the settlement amount and the actual reconstruction cost because the dwelling limit was set years ago and hasn’t kept up with current construction pricing. The homeowner pays the difference out of pocket or accepts a reduced scope of reconstruction.
Colorado construction costs have risen significantly. Mountain community construction costs are higher than metro area averages due to logistics, materials transport, and the complexity of working in mountain locations. Policies that were adequate five or ten years ago may have coverage gaps today.
Review your dwelling coverage limit with your insurance agent annually. Replacement cost coverage — not market value coverage — is what you need, and it needs to reflect current construction costs per square foot in your specific location.
Extended replacement cost endorsements and guaranteed replacement cost endorsements provide additional protection above the policy limit when reconstruction costs exceed the limit. These endorsements are worth having and are often reasonably priced.
Ordinance and Law Coverage — The Mountain Home Issue
Ordinance and law coverage (sometimes called code upgrade coverage) is one of the most commonly missing coverage endorsements in homeowner’s policies — and it matters significantly for older homes.
When a fire causes significant damage and reconstruction is required, the rebuilt portions must meet current building code — not the code that was in effect when the original structure was built. The cost difference between restoring to original specification and restoring to current code is a real cost that isn’t covered under standard dwelling coverage.
What I’ve seen happen is homeowners with 1970s construction who had no ordinance and law coverage discover during reconstruction that current code requires upgraded electrical systems, insulation levels, or structural connections that the original construction didn’t have. That upgrade cost — sometimes tens of thousands of dollars — comes out of pocket because the policy didn’t cover it.
In Lakewood and the mountain communities around Pine, Conifer, and Evergreen, many homes are older construction. Code upgrade exposure is real. Ordinance and law coverage is the endorsement that covers it. If you don’t have it, ask your agent about adding it.
Actual Cash Value vs. Replacement Cost for Personal Property
This is a significant coverage distinction that many homeowners don’t notice until they have a claim.
Replacement cost value (RCV) for personal property pays what it costs to replace a damaged item with a new equivalent item at current prices. A five-year-old television that was destroyed in a fire gets paid at the current retail price of a comparable new television.
Actual cash value (ACV) for personal property pays the replacement cost minus depreciation. That same five-year-old television gets paid at what a five-year-old television is worth today — which may be a fraction of a new equivalent.
The difference across a full household contents claim can be very significant. Furniture, electronics, appliances, clothing — all depreciated versus all replaced at current prices. Standard policies often default to ACV for personal property. Replacement cost coverage for personal property is a policy endorsement worth having.
If you have an ACV policy and suffer a fire loss, there are options — public adjusters who specialize in maximizing ACV settlements, and in some states negotiation provisions — but prevention is better. Review your personal property coverage basis with your agent.
The Role of Documentation in Getting Full Coverage
Insurance companies cover what’s documented. A thorough claim supported by comprehensive documentation — photographs, moisture readings, scope of loss with quantities and methodology, contents inventory with values — settles more completely than a poorly documented claim for the same loss.
What I’ve seen happen is claims where inadequate documentation led to scope items being missed or disputed, resulting in settlements that didn’t fully cover the loss. The same physical damage, documented comprehensively, would have produced a more complete settlement.
From the first day after the fire, documentation is being built. Every photograph, every moisture reading, every piece of scope documentation is building the file that determines how the claim settles. Choosing a restoration contractor who documents comprehensively isn’t just about good restoration practice — it’s about getting your insurance claim settled fairly.
Working With Your Adjuster
Your adjuster works for the insurance company. They are professionals doing a job, and most are fair and competent. But their interest is assessing and settling the claim as accurately as possible from the insurer’s perspective — which may or may not fully align with your interests.
You have the right to dispute scope items you disagree with. You have the right to have your contractor’s documented scope considered. If you disagree with the adjuster’s assessment, the process includes requesting a re-inspection, submitting your contractor’s supporting documentation, and as a last resort, invoking the appraisal or arbitration provisions in your policy.
A common thing seen in the industry is adjusters who initially miss scope items — particularly odor remediation, contents, and HVAC cleaning — that are clearly supported by documentation when presented. This isn’t bad faith; it’s the reality of complex claims where one adjuster is assessing a large loss. Working constructively with the adjuster and supporting every scope position with documentation produces better outcomes than confrontational approaches.
The IICRC standards for fire restoration are at https://www.iicrc.org/page/IICRCStandards.
Call 303-816-0068 immediately after a fire. We work directly with your adjuster, document everything, and ensure your claim is as complete and well-supported as possible. We respond 24 hours a day in Lakewood, Pine, Conifer, Evergreen, Bailey, and the surrounding mountain communities.
