Electrical Fires & Home Insurance: What You Need to Know

Electrical fires, which are blamed on everything from clothes dryers to extension cords, cause heartache and headaches for thousands of Americans each year.

According to the National Fire Protection Association, electrical failures or malfunctions were listed as factors in an estimated 46,500 home fires reported to U.S. fire departments each year.

The annual cost of property damage caused by home electrical fires is $1.5 billion. Electrical fires account for 13% of all reported home fires in the United States.

While the cost of electrical fire damage can quickly mount, most homeowner's insurance policies cover the losses in full. "Fire is still the one you have the broadest protection for," says Amy Bach, executive director of United Policyholders, a nonprofit organization that educates consumers about insurance. You should also find out what your home insurance covers in the event of a fire.

Here are six facts about electrical fires and home insurance policies that you should be aware of.

How to File an Insurance Claim for Electrical Fires

  1. Document the damage.

If your home is damaged by an electrical fire, take pictures of the affected area as soon as it is safe to do so, advises Bill Begal, president of Begal Enterprises Inc., a disaster restoration company based in Maryland. Make a copy of your insurance policy and read it thoroughly to understand your rights and responsibilities when dealing with your insurance company.

Begal suggests getting a notebook and recording all dates, times, and people you speak with about your insurance claim. "You'll be talking to a lot of people and dealing with things you've never dealt with before if you've never had an electrical fire before – write everything down to keep it all straight," he says.

  1. Keep the claim open.

"The two main issues in a fire are extreme heat and poor air quality," Bach says.

Maintain your claim for a partial-loss fire for at least six months. This will give you more time to detect problems that may not be obvious right away, such as outdoor plants that have been damaged in a fire but do not wither right away.

  1. Clean or replace smoke-damaged items.

Most homeowner's insurance policies cover smoke damage caused by a house fire. This could include bills for professional cleaning of items like curtains or rugs. If you take smoke-damaged furniture to a professional cleaning service and it is determined that they cannot be salvaged, your insurance company may pay to replace them.

  1. Realize that mold may not be covered.

If an electrical fire breaks out in a portion of your home, the local fire department may use powerful hoses to prevent the fire from spreading. These firefighting efforts may not only extinguish the flames, but they may also leave a significant amount of water in the walls. Mold issues, particularly in wet drywall, could arise as a result.

According to Bach, coverage for this type of damage may be excluded or limited in a homeowner's policy. In recent years, some insurance companies have excluded mold damage from certain policies. In the event of a fire, have your home's drywall, as well as the underlying wood on the interior and exterior of the house, inspected for mold damage.

  1. Look into safety-related discounts.

According to the Insurance Information Institute, you may be able to get a 5 percent discount on your home insurance premium if you install certain safety devices, such as a smoke detector.

Some companies provide larger discounts for more sophisticated devices, such as a sprinkler system and a fire and burglar alarm that alerts police or fire departments when an emergency occurs. For example, State Farm provides a discount on homeowner's insurance for the installation of fire sprinklers. Smoke alarms and fire extinguishers are discounted by Allstate.

  1. Focus on home fire prevention.

According to the National Fire Protection Association, approximately half of all home electrical fires involved electrical distribution or lighting equipment, such as outlets, circuit wiring, and extension cords. And nearly half of them involved appliances like washers and dryers, fans, space heaters, and air conditioning systems.

According to Tom Olshanski, a spokesman for the U.S. Fire Administration, you should check your home's wiring on a regular basis, such as at the beginning of summer and the beginning of winter. Look for broken outlets, light switches that are too hot to touch, and lights that flicker. If you notice anything out of the ordinary, have it checked by an electrician.

Take note of how the appliances are used as well. "When I'm not using my toaster or coffeemaker, I unplug them," Begal says. Keep lamps on level surfaces and use bulbs that are rated for the lamp's wattage. You might also be interested in a list of home fire prevention tips.