Does Full Coverage Car Insurance Cover Fire?

The term “full coverage” can be misleading, as it does not refer to a single, all-encompassing policy. Instead, it represents a combination of various insurance types bundled together. Whether fire damage is covered depends on the specific components that comprise an individual’s policy.

Deconstructing “Full Coverage”

“Full coverage” is a colloquial phrase describing an auto insurance policy that includes multiple types of coverage. This bundle typically consists of liability, collision, and comprehensive coverage.

Liability coverage is mandatory in nearly every state. It covers damages or injuries caused to other people or their property if the policyholder is at fault in an accident. This coverage does not extend to damage to the policyholder’s own vehicle, so it does not cover fire damage to your car.

Collision coverage pays for damage to your own vehicle resulting from a collision with another vehicle or object. While this covers impacts, it generally does not cover fire damage unless the fire is a direct consequence of a covered collision.

Comprehensive coverage is the component that addresses non-collision damages to your vehicle, and it is this specific type of coverage that typically includes protection against fire.

Comprehensive Coverage and Fire

Comprehensive coverage, sometimes referred to as “Other Than Collision” or “Physical Damage” coverage, covers damage to a vehicle from events not involving a collision. This includes protection against fire, theft, vandalism, natural disasters like hail or floods, and impacts with animals.

If a vehicle catches fire due to an electrical issue, mechanical failure, or an external event such as a wildfire, a structure fire spreading to the car, or arson, comprehensive coverage typically provides financial protection.

This coverage helps pay for the repair or replacement of the vehicle, up to its actual cash value (ACV), after accounting for a deductible. Actual cash value represents the car’s market value at the time of the loss, factoring in depreciation. Many lenders require comprehensive coverage for vehicles that are financed or leased.

Scenarios and Specifics of Fire Coverage

If a fire results directly from a collision, the damage may be covered under collision insurance. If the fire is a separate, non-collision incident, comprehensive coverage is the applicable protection.

Fires caused by external sources, such as wildfires, a neighboring garage fire spreading to the vehicle, or a lightning strike, are covered by comprehensive insurance. Damage from arson or vandalism is also covered under comprehensive policies. Fires originating within the vehicle due to mechanical or electrical issues are covered, provided they are not a result of gross negligence or intentional acts by the policyholder.

Despite broad coverage, certain exclusions apply. Intentional acts by the policyholder, such as setting the car on fire, are not covered and may lead to legal consequences. Damage incurred while the vehicle is being used for illegal activities is also excluded. Damage related to unapproved or improperly installed aftermarket modifications may not be covered. When a claim is filed, a deductible, which is a pre-determined amount the policyholder pays out-of-pocket, will apply to the comprehensive claim before the insurance coverage begins.