OLDWICK, NJ–(BUSINESS WIRE)–am best has a Financial Strength Rating (FSR) of A (Excellent) and a Long-Term Issuer Credit Rating (Long-Term ICR) of “a” (Excellent) from the American Reliable Insurance Company (ARIC) (Scottsdale, AZ), a Member of Global Indemnity Group, LLC (Global Indemnity) [NYSE: GBLI].

These credit rating (rating) actions follow the recent announcement that ARIC, a subsidiary of Global Indemnity, completed the divestment of its Farm, Ranch and Equine Book of Renewal businesses to Everett Cash Mutual Insurance Company (ECM ) has completed. Global Indemnity also announced that it has agreed to sell ARIC to ECM.

Under the proposed agreement, Global Indemnity will receive approximately $85 million, including the release of capital currently supporting ARIC’s operations. Until ECM acquires ARIC, ECM Global Indemnity will provide 100% quota reinsurance in respect of policies subject to ECM’s Extension Rights Agreement. The sale of ARIC is expected to close sometime in the first quarter of 2023 and is subject to customary regulatory approvals.

Upon closing of the transaction, ARIC will no longer be part of Global Indemnity nor a member of Global Indemnity’s intercompany pooling arrangement from which its ratings are derived. The status of “Under Review with Adverse Impact” reflects the expected de-rating of the group and the expected transfer of risk from Global Indemnity to ECM.

This press release relates to ratings published on AM Best’s website. All ratings information relating to the press release and relevant disclosures, including details of the issuing authority for each rating referenced in this press release, can be found at AM Best Last review activity site. For more information on the use and limitations of rating opinions, see Best Credit Ratings Guide. For information on the proper use of Best’s Credit Ratings and AM Best press releases in the media, go to Media Guide – Proper Use of Best Credit Ratings and AM Best Rating Action Press Releases.

AM Best is a global rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company operates in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Homes can catch fire for many reasons, from lightning strikes to a pot left on the stove for too long. According to the National Fire Protection Association, firefighters fought an average of nearly 350,000 home fires annually from 2015-2019.

You can reduce the risk of a house fire by not lighting the grill right next to your wooden railing and by keeping flammable liquids in the right containers. However, since you cannot eliminate every physical risk, it is wise to protect yourself against the financial risk of fire damage with homeowners insurance.

This is what you need to know about household contents insurance and fire damage:

Does home insurance cover fire damage?

Yes, household contents insurance covers fire damage in most cases. According to the Insurance Information Institute, fires and lightning were the second or third most common insurance claim category for homeowners each year from 2016 through 2020. They accounted for about a quarter of claims each year, and the average loss was $77,340.

Normal homeowners insurance covers certain risks. Most people have an HO-3 policy, which provides cover for open hazards to the structure of your home. This means any cause of fire damage is covered, except for things specifically excluded from the policy.

As for your personal property, a standard HO-3 policy provides named perils coverage that only insures your personal property against specific events listed in the policy. Fires and lightning strikes are usually included.

What types of fire damage does home insurance cover?

Your insurance will likely cover fire damage to your home caused by these sources, as long as the fire is sudden and accidental:

• candle fire
• Kitchen fires (including grease fires and unattended stove fires)
• space heater fires
• defective devices
• Worn or faulty wiring
• Overloaded circuits
• Cigarette or smoker fires
• barbecue fire
• Explosions in propane gas tanks
• fireplace fires
• Chimney fires in the chimney
• wood stove fire
• Gasoline, paint thinner, oil and mineral spirits fires
• brush fire
• garage fires
• attic fires
• Christmas tree fires
• Fires from a neighbor’s house that have spread to your home
• wildfires, wildfires and bushfires
• fires caused by vandals

Types of fire insurance and coverage limits

Your home contents insurance consists of six individual covers, all of which may be relevant after a fire:

When does household contents insurance not cover fire damage?

Most home insurance policies exclude losses due to certain events. Home insurance exclusions that may apply following a home fire include:

• Vermin: Insurers consider damage from rats, mice, squirrels, raccoons and other wildlife to be preventable. Mice and rats, in particular, chew on electrical wiring and the damage can lead to a fire. Your policy may not cover this type of fire if you had an obvious bug problem that you ignored.
• Lack of maintenance or neglect: If your home had obvious damage that you did not fix and that damage causes a fire, your insurer may deny your fire damage claim.
• Willful damage: Homeowners insurance does not cover intentional damage if the policyholder caused it. Don’t set your house on fire hoping for an insurance payout. You would commit two crimes: arson and insurance fraud. Insurance carriers and arson investigators have ways of uncovering arson, and their collective experience and deep pockets won’t fool you.
• vacancy: If you move out of your home and leave it empty for too long, your homeowners policy may not cover it. However, some insurers write policies specifically for vacant homes with coverage for named perils, including fire.
• Continuous water seepage or seepage: Water damage can lead to electrical fires. If you’ve had a gaping hole in your roof for a month and an electrical fire breaks out in your attic, your damage may not be covered.
• acts of war: Property insurance does not cover acts of war, whether or not declared by Congress.

In questionable situations, a public adjuster or insurance claims attorney may be able to help you.

Cash: What is home insurance?

Additional coverage options for fire damage

If your home is damaged by fire, your financial losses may not be as severe if you have these types of coverage:

• Replacement cost coverage: Instead of paying you the actual cash value of your property, which takes depreciation into account, your insurer will pay you the full cost of rebuilding the home at today’s prices. This includes labor and material costs.
• Extended Replacement Cost Coverage: This coverage can be a godsend when recovery costs in your area are skyrocketing after a natural disaster (e.g. wildfire). Damage to numerous homes often means there are not enough workers and materials to meet demand.

How to report fire damage

In order to claim fire damage from household contents insurance, you usually have to proceed as follows:

1. Notify your insurer. Contact your insurance provider and submit a claim online or by phone.
2. Document the damage. Take photos and video of the fire damage to show your insurance carrier.
3. Make temporary repairs. Protect your property from further damage through necessary repairs. Avoid making permanent or major repairs until the insurance adjuster has assessed the damage.
4. Meet with the claims adjuster. After you make a claim, your insurer will send a claims adjuster to your property to inspect the damage and file a report. Respond promptly to calls and messages from your claims adjuster. Once they’ve completed their report, they’ll provide an estimate of how much your insurer should pay for the repair.
5. Keep your receipts. Keep detailed receipts for temporary repairs, additional living expenses, and other expenses your insurer may reimburse.

Continue reading: How much home insurance do I need?

Disclaimer: All insurance related services are provided by Young Alfred.

About the author

Amy Fontinelle

Amy Fontinelle is a mortgage and credit card authority and a Credible contributor. Her work has appeared in Forbes Advisor, The Motley Fool, Investopedia, International Business Times, MassMutual, and others.

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For people working in companies with 100 employees or fewer, the average rate increase is 7.9 percent, while individual trading market increases are slightly higher at 9.7 percent.

That includes about 1.1 million workers in the state, about 10 percent of the total workforce. Most large employers are self-insured, meaning they directly manage healthcare costs for their employees. Others get their insurance through government programs.

Health insurers in the metropolitan area and elsewhere in New York demanded much larger rate increases than the DFS authorized.

For example, CDPHP, a large local health insurer, requested a 17.4 percent increase for its small business customers, but was only approved for an 11.5 percent increase.

MVP, another local health insurer, requested a 14.2 percent increase for its small business plans but received an 11.7 percent increase.

These increases apply to what companies pay, so some companies may pass the entire increase on to their employees.

Rates for people who buy insurance outright are generally more expensive and rate increases are higher.

For example, CDPHP requested a 28.4 percent increase in individual plans and received a 16.5 percent increase from DFS.

Though these are significant increases that will weigh on the average worker, DFS says its rate decisions have kept health insurers’ profits in half at 1 percent, which is “historically low” compared to previous years.

The agency says it saved clients nearly $800 million in potential rate increases, which would have cost New Yorkers about an additional $100 a month. The increases will instead average less than half.

When filing their claims this year, insurers said they had to charge more due to the COVID-19 pandemic, inflation, and new government regulations and taxes.

“Rising medical costs and inflation continue to put upward pressure on premiums,” DFS Superintendent Adrienne Harris said in a statement. “With our tariff actions announced today, we continue to prioritize the financial well-being of consumers while ensuring New Yorkers have access to a robust, stable health insurance market.”

However, the industry was not pleased that its claims were watered down and did not reflect the reality of the health insurance industry.

“The rate filings were reasonable and appropriate, reflecting underlying costs and accounting for premium reductions that the state has imposed in recent years,” Eric Linzer, CEO of the New York Health Plan Association, said in a statement. “Unfortunately, the final approved rates do not fully account for the factors driving underlying healthcare costs.”