Adequacy of structural fire design in uncommon structures is conceptually ensured through cost-benefit analysis where the future costs are balanced against the benefits of safety investment. Cost-benefit analyses, however, are complicated and computationally challenging, and hence impractical for application to individual projects. To address this issue, design guidance proposes target reliability indices for normal design conditions, but no target reliability indices are defined for structural fire design. We revisit the background of the cost-optimization based approach underlying normal design target reliability indices then we extend this approach for the case of fire design of structures. We also propose a modified objective function for cost-optimization which simplifies the evaluation of target reliability indices and reduces the number of assumptions. The optimum safety level is expressed as a function of a new dimensionless variable named “Damage-to-investment indicator” (DII). The cost optimization approach is validated for the target reliability indices for normal design condition. The method is then applied for evaluating DII and the associated optimum reliability indices for fire-exposed structures. Two case studies are presented: (i) a one-way loaded reinforced concrete slab and (ii) a steel column under axial loading. This study thus provides a framework for deriving optimum (target) reliability index for structural fire design which can support the development of rational provisions in codes and standards.