Will Car Insurance Pay for a New Car If Your Garage Burns Down?

Last Updated on October 20, 2022

If your garage burns down, then your car could be a total loss.

If you have insurance, then you could be protected. Most insurance policies with comprehensive coverage cover fire damage. Your insurer will pay compensation based on the value of your vehicle.

Will Car Insurance Pay for a New Car If Your Garage Burns Down?Does car insurance pay for a new car if your garage burns down? How much money will you get after a garage fire? Find out everything you need to know about garage fires and car insurance today.

Comprehensive Coverage Should Cover Fire Damage

A standard car insurance policy consists of liability coverage, collision coverage, and comprehensive coverage.

Fire damage falls under comprehensive coverage. A standard policy with comprehensive coverage should cover fire damage, including garage fires.

Here’s how a standard car insurance policy works:

Liability Coverage (Required in Most States): This protects other drivers from your actions. It compensates other drivers for medical bills, vehicle damage, and other costs incurred as a result of your actions. Most states require drivers to carry bodily injury and property damage liability coverage.

Collision Coverage (Optional in All States): To protect your own vehicle, you may carry collision coverage. It compensates you for vehicle damage and replacement after an accident, regardless of fault.

Comprehensive Coverage (Optional in All States): Comprehensive coverage covers damage that occurs to your vehicle outside of a collision. It covers collisions with animals, for example, along with theft, vandalism, and storm damage. Most comprehensive coverage policies cover fire damage, water damage, and wind damage.

If you have all three types of coverage, then you have full coverage car insurance. Your car is fully protected against most types of losses.

How Comprehensive Coverage Covers Fire Damage

If your garage burns down after a fire, then you might make two claims:

  • One claim under your home insurance policy (for damage to your garage, home, and possessions)
  • Another claim under your car insurance policy (for damage to your vehicle)

Homeowners insurance policies exclude coverage for vehicles. Even if your car was parked in your garage at the time of the accident, you cannot claim your vehicle under your homeowners insurance policy. No standard homeowners insurance policy covers vehicle replacement costs.

Instead, you make a claim through your car insurance. Your car insurance policy should cover the cost of replacing or repairing your vehicle after fire damage.

How Much Compensation Do I Receive?

If your claim is successful, then your insurer will compensate you based on the value of your home before the loss (through your homeowners insurance policy) and the value of your vehicle before the loss (through your auto insurance policy).

The insurer has an obligation to restore your property (including your home, car, and other covered property) to pre-loss condition.

If your garage burns down, then your car is generally considered a total loss. It would cost more to repair your car than your car is worth. At this point, your insurer declares the incident a ‘total loss’. The insurer calculates the value of your car before the accident, then sends you a check for this amount.

Let’s say your garage burns down with your Honda Civic inside. You bought that Honda Civic for $25,000 three years ago. Due to depreciation, the Honda Civic has an actual cash value of around $16,000 at the time of the loss. If your Honda Civic is declared a total loss, then your insurer sends you a check for $16,000 (minus your deductible).

In some cases, you extinguished your garage fire before it caused extensive damage. The garage fire damaged your vehicle, but your vehicle is not a total loss. In this situation, the insurer will determine the cost of repairing your vehicle, then send you a check equal to that amount. In most cases, you take your vehicle to a mechanic or body shop, and the insurer pays the mechanic or body shop based on the cost of repairs.

Whether your vehicle is a total loss or not, your insurer has an obligation to make you whole again after the fire. That’s why you have insurance.

Will Insurance Buy Me a New Car?

Will car insurance pay for a new car if your garage burns down?

Most car insurance companies compensate you based on the actual cash value of your vehicle at the time of the incident. That means you’ll receive a check for the value of the vehicle. You can spend that check on a new car, a used car, or whatever you like.

However, if you have new car replacement coverage on your policy, then it’s possible insurance will literally buy you a new car.

New car replacement coverage is an optional add-on that replaces your damaged vehicle with a new vehicle after an incident.

Types of Garage Fires Covered by Car Insurance

A standard comprehensive coverage policy covers all types of accidental fire damage. Assuming the fire was accidental, and assuming you had proper coverage, you should receive compensation from your insurer for that garage fire.

Types of fires covered by car insurance include:

Arson: If your garage, home, or vehicle were intentionally set on fire, then you are a victim of the crime of arson. You must file a police report, and your insurer should cover the cost of repairing or replacing your vehicle after this arson.

Forest Fires: An ember from a nearby forest fire may lodge itself into your roof, burning down your house and garage. A standard homeowners insurance policy covers forest fire damage. However, some policies restrict coverage, particularly if you live in a region prone to forest fires.

Engine Fires: It’s rare for an engine to spontaneously combust, but it can occur. If your car has an engine fire, then insurance should cover it. Typically, insurers don’t cover mechanical breakdowns (they’re part of wear and tear). However, most policies have an exception for fire damage caused by a mechanical breakdown.

Other Types of Garage Fires: Generally, insurers cover most types of garage fire damage and other fire damage to your vehicle.

Why Would an Insurer Deny My Fire Damage Insurance Claim?

Most auto insurance policies cover fire damage. However, insurers could deny fire damage insurance claims in certain situations.

Some of the reasons an insurer would deny a fire damage claim include:

Suspicion of Insurance Fraud: You cannot burn down your own garage, set your vehicle on fire, or tell someone to commit arson, then make an insurance claim. This is insurance fraud. If your insurer determines you lied about the fire damage, then your claim will be denied and you could face criminal charges.

Lack of Comprehensive Coverage: You make a claim for fire damage through your comprehensive coverage. Comprehensive coverage is optional in all states. It covers damage to your vehicle that occurs outside of accidents. If you don’t have comprehensive coverage, then you may not receive compensation if your garage burns down.

Other Exclusions: Insurers add different exclusions to policies. Your policy might have an exclusion for forest fire damage, for example. Check your policy to make sure your fire damage is not excluded.

Final Word on Garage Fires and Car Insurance

If your garage burns down, then you can make a claim through your auto insurance policy’s comprehensive coverage. Comprehensive coverage covers fire damage, water damage, and other damage that may occur to your vehicle when parked at home.

Homeowners insurance does not cover vehicle damage.

If your claim is successful, your insurance company will compensate you based on the cost of repairing or replacing your vehicle. You can put this money towards a new car – or anything you like.

Contact your insurer to begin the claims process if your garage burned down and damaged your vehicle.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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