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🔥 '''Fire insurance''' is one of the oldest forms of [[Definition:Property insurance | property insurance]], providing coverage against loss or damage to buildings, contents, and other insurable assets caused by fire and, depending on the policy form, related perils such as lightning, explosion, and smoke. Historically, fire insurance gave rise to the modern insurance industry itself — the Great Fire of London in 1666 spurred the creation of the first fire insurance offices, and for centuries the line remained the backbone of [[Definition:Property and casualty insurance (P&C) | property and casualty]] underwriting. Today, standalone fire policies are less common in developed markets, where fire coverage is typically bundled into broader [[Definition:Homeowners insurance | homeowners]], [[Definition:Commercial property insurance | commercial property]], or [[Definition:Multi-peril policy | multi-peril]] forms, but the term retains regulatory and actuarial significance worldwide.

🛠️ When a fire loss occurs, the [[Definition:Policyholder | policyholder]] files a [[Definition:First-party claim | first-party claim]], and the insurer dispatches an [[Definition:Adjuster | adjuster]] to assess the damage, determine the [[Definition:Cause of loss | cause of loss]], and verify that the event falls within the policy's covered perils. The adjuster evaluates whether the fire was accidental, considers any applicable [[Definition:Exclusion | exclusions]] — such as arson by the insured — and calculates the loss amount using either [[Definition:Actual cash value (ACV) | actual cash value]] or [[Definition:Replacement cost | replacement cost]] methodology, depending on the policy terms. [[Definition:Subrogation | Subrogation]] may follow if the fire resulted from a third party's negligence, allowing the insurer to recover amounts paid. Large commercial fire losses often trigger [[Definition:Facultative reinsurance | facultative]] or [[Definition:Treaty reinsurance | treaty reinsurance]] recoveries, particularly for high-value industrial or warehouse risks.

📊 Despite being folded into broader policy forms, fire remains a critical peril class for [[Definition:Actuarial analysis | actuarial analysis]], [[Definition:Rate making | rate making]], and [[Definition:Catastrophe modeling | catastrophe modeling]]. [[Definition:Wildfire | Wildfire]] exposure in states like California and Colorado has pushed fire-related losses to catastrophic levels in recent years, forcing carriers to re-evaluate [[Definition:Underwriting guidelines | underwriting guidelines]], tighten [[Definition:Risk selection | risk selection]], and in some cases withdraw from fire-prone territories altogether. The escalating severity of wildfire seasons has also prompted state regulators to intervene on [[Definition:Rate adequacy | rate adequacy]] and availability, making fire insurance a flashpoint — both literally and figuratively — in debates over [[Definition:Insurance market | market]] sustainability and [[Definition:Climate risk | climate risk]] adaptation.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Property insurance]]
* [[Definition:Wildfire]]
* [[Definition:Homeowners insurance]]
* [[Definition:Commercial property insurance]]
* [[Definition:Replacement cost]]
* [[Definition:Catastrophe modeling]]
{{Div col end}}

Definition:Fire insurance - Revision history

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