Fire insurance is a type of property insurance that covers damage and losses caused by fire.

The return of damages in fire insurance may be capped at a rate less than the cost of the actual loss incurred. Thus making way for a separate fire insurance policy.

Fire insurance covers the policyholder against fire loss or damage from several sources. The sources include fires that broke out due to electricity, such as faulty wiring and gas explosions. This insurance also covers fires that began due to lightning and natural disasters.