Fire is still the number one cause of loss for a homeowners policy. Not only can a fire break out in your residence, but a garage fire can also happen pretty easily. Think about what's stored in a garage- gasoline, lawn chemicals, propane tanks and plenty of other flammable items. So what if your car, or motorcycle or other vehicle is parked in your garage and is damaged by a fire? How does the insurance work for that?
To get the answer, let's take a deeper look at both the auto insurance policy and homeowners insurance policy for examples of what's covered and typical exclusions.
Step 1- The homeowners insurance policy- how does it cover motor vehicles? Or does it?
Since the fire started at the residence, it's a safe bet that we would look to the homeowners insurance policy first for coverage. Unfortunately, most homeowners insurance policies include an exclusion for motor vehicles. The reason? Because there are auto insurance policies and they are designed to cover motor vehicles (tip: many policy exclusions are in place because there is a better policy available to cover what's excluded).
Here's a sample motor vehicle exclusion pulled directly from one of our company's policies:
We” do not pay for loss to: 1. land motor vehicles and parts. “We” do cover vehicles not subject to motor vehicle registration which are: a. designed to assist the handicapped; b. used solely to service the “residence premises;” or c. low‐power recreational land motor vehicles not designed for use on public roads, but only if they are not built, customized or altered to surpass a speed of 10 miles per hour and are not a motorized bicycle, moped, skateboard, scooter or motor bike. (I'm thinking those kiddie cars/jeeps that you see toddlers driving around the yard or on the street would qualify here).
It's safe to say that any vehicle subject to motor vehicle registration (hence making it a motor vehicle) is excluded. So we'll get nothing to fix the damage sustained by the car in the garage fire. Let's move onto the auto policy next.
Step 2- So if the homeowners policy won't pay, what does the auto policy cover in this situation?
To find coverage for damage to the vehicle, you have to look at a specific portion of the policy- "Coverage for Damage to Your Vehicle" (or something similar). This is the portion that covers direct physical damage to your vehicle. Physical damage has two parts:
Comprehensive covers glass breakage, animal hits, falling objects, vandalism, theft and FIRE. So when the garage catches fire and burns your vehicle, the comprehensive coverage would pay for the damage.
Like most auto insurance claims, comprehensive will pay to repair the vehicle OR if the cost to repair exceeds the actual cash value, then the vehicle would be totaled. Read our article “What Happens When Your Vehicle is Totaled” for a more detailed explanation of a totaled vehicle.
What if you don't have comprehensive coverage on your auto policy?
Unfortunately, you're out of luck. Since your homeowners policy excludes motor vehicles, your auto policy physical damage is the only thing left to pay for the damage to your vehicle. If you don't have comprehensive coverage, there's nothing else available.
Note: If the fire was set by someone else, say a disgruntled neighbor, and found to be at fault, his or her homeowners insurance liability would pay for the damage to your vehicle.
Confused or uncertain what your homeowners insurance policy covers (or DOESN'T?) Call or click today for your homeowners quote. We'd love to clear up your confusion and get you the best policy!