Whose insurance pays up when a neighbor’s fire damages your property? 

Oct 26, 2022, 6:52 PM

SALT LAKE CITY — Putting up the hundreds of people who are still unable to go home due to Tuesday night’s four-alarm fire in Sugar House will not be cheap. So, who pays? The answer, we found, is it depends.

If your neighbor’s home catches on fire, the fire does not always stay on their property. From melted siding to smoke permeating all your stuff or even serious damage to your home, a neighbor’s fire can be costly.

“Smoke and water damage is way more expensive than you think,” said Matt Child, CEO of Utah Independent Agents.

We asked him to break down the dollars and cents of what insurance covers and what it does not cover.

“You’re going to have your dwelling covered,” Child said. “You’re going to have contents coverage. You’re going to have liabilities covered and part of that is loss-of-use.”

That means your own insurance policy not only covers the damage, but probably also puts you up in a hotel if it comes to that. That goes for both homeowners and renters, that is, if they have insurance.

Most homeowners do, their bank mandates it. According to simplyinsure.com, 57% of renters in the U.S. have renters insurance.

What happens if you don’t have a renters insurance policy?

“You’re not insured. You have no coverage. You’re out of luck,” Child said.

If it’s your neighbor’s home that burns, your insurance covers you. Your insurance company may choose to go after the neighbor’s insurance for reimbursement.

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Whose insurance pays up when a neighbor’s fire damages your property?