Homeowners Insurance and Wildfires: What You Need to Know

As wildfires and other natural disasters become more frequent and severe, homeowners—particularly those in high-risk areas—are increasingly concerned about protecting their homes and families. An essential part of this protection is having adequate homeowners insurance. In this article, we will explore how homeowners insurance covers wildfire damage, what to look for in a policy, and steps you can take to minimize risks and ensure adequate coverage. By the end, you will better understand homeowners insurance and wildfire coverage.

Understanding Wildfires and Homeowners Insurance

Homeowners insurance typically covers damage caused by wildfires, but the specifics can vary depending on the location, provider, and policy. Understanding your coverage is essential to ensure you’re not left with unexpected expenses after a disaster.

What Does Standard Homeowners Insurance Cover?

Most standard homeowners insurance policies cover the following in the event of a wildfire:

• Dwelling Coverage: Pays to repair or rebuild your home if it’s damaged or destroyed by fire.
• Personal Property Coverage: Covers the cost of replacing belongings such as furniture, clothing, and electronics.
• Additional Living Expenses (ALE): Covers temporary housing and extra costs if your home becomes uninhabitable.
• Liability Protection: Offers financial protection if someone is injured on your property during a wildfire or if you’re held responsible for damages.

However, the coverage limits and exclusions can vary, so it’s essential to review your policy thoroughly.

In 2024, wildfires burned over 8.8 million acres of land in the United States. 

Are Wildfires Always Covered?

Fire damage is typically one of the primary perils covered by homeowners insurance. Most policies include protection against fires caused by events like kitchen accidents, lightning strikes, or wildfires. However, if you live in a high-risk wildfire zone—areas identified as having an elevated wildfire risk—your coverage may come with specific limitations.

In such high-risk zones, insurers might implement restrictions such as lower coverage limits or separate wildfire deductibles. These details will be explicitly outlined in your policy, underscoring the importance of reviewing and understanding your coverage before a disaster strikes. For homeowners in these regions, supplemental coverage options can offer added protection.

If your standard policy excludes wildfire damage or imposes restrictions, consider these alternatives:

• Surplus Line Carriers: Specialized insurers providing coverage for properties in high-risk areas.
• FAIR Plans (Fair Access to Insurance Requirements): State-sponsored programs offering basic coverage for homeowners unable to secure insurance through traditional providers.

Exploring these options is essential to ensure your home is adequately protected, particularly if you live in a wildfire-prone area.

Evaluating and Enhancing Your Coverage

Ensuring you have the right coverage before a wildfire occurs can help you avoid significant stress and financial strain. Here are steps to take when evaluating your homeowners insurance policy:

1. Assess Your Dwelling Coverage

Your dwelling coverage should reflect the cost to rebuild your home, not its market value. Construction costs can rise significantly after a wildfire due to increased demand for labor and materials. Consider adding extended replacement cost or guaranteed replacement cost coverage to account for these potential increases.

2. Review Personal Property Limits

Ensure your personal property coverage adequately protects your belongings. Conduct a home inventory to document valuable items and determine if you need additional endorsements for high-value possessions like jewelry, artwork, or collectibles.

3. Check for Additional Living Expenses (ALE) Coverage

Verify your ALE coverage limits to ensure they’re sufficient to cover temporary housing, food, and other expenses if you’re displaced for an extended period.

4. Understand Policy Exclusions and Deductibles

Review your policy’s exclusions and wildfire-specific deductibles. In high-risk areas, wildfire deductibles can range from 1% to 5% of the dwelling coverage amount.

5. Consider Umbrella Coverage

If you live in a wildfire prone area, an umbrella policy can provide additional liability protection, especially if you’re held responsible for damages caused by a fire originating on your property. To learn more about umbrella policies, check out our article The Importance of an Umbrella Policy.

Taking these steps ensures your coverage is comprehensive and can minimize financial burdens in the event of a wildfire.

Mitigating Risks and Reducing Premiums

Insurance providers often reward homeowners who take steps to reduce wildfire risks. These steps not only improve your home’s safety but may also lower your premiums and enhance your ability to secure coverage. Here’s how you can protect your home and reduce costs:

1. Create Defensible Space:

Maintain a defensible space around your home by:

• Clearing dead vegetation and flammable materials.
• Pruning trees and shrubs to minimize fire spread.
• Keeping a safe distance between vegetation and structures.

2. Upgrade Your Home’s Fire Resistance

Invest in fire-resistant building materials and upgrades such as:

• Class A roofing materials (e.g., metal, slate, or asphalt shingles).
• Fire-resistant siding and decking.
• Ember-resistant vents and screens.

3. Install Fire Safety Features

Equip your home with fire safety features, including:

• Fire extinguishers and smoke detectors.
• Sprinkler systems and fire-resistant landscaping.
• Emergency water sources, such as tanks or swimming pools.

4. Participate in Community Mitigation Programs

Join local wildfire mitigation initiatives or Firewise USA programs to reduce community risks and improve your eligibility for insurance discounts.

Filing a Claim After a Wildfire

If your home is affected by a wildfire, prompt action can expedite the claims process and ensure you receive fair compensation. Follow these steps:

1. Contact Your Insurance Provider: Notify your insurer as soon as possible to initiate the claims process.
2. Document the Damage: Take photos and videos of the damage to your home and belongings. Keep receipts for any immediate expenses, such as temporary lodging.
3. Provide a Home Inventory: Share your pre-disaster inventory to support your claim for personal property losses.
4. Work with an Adjuster: Cooperate with your insurer’s claims adjuster to assess the damage and determine compensation.
5. Stay Organized: Keep detailed records of all communication with your insurer, including dates, names, and summaries of conversations.

Conclusion

Wildfires are a growing threat in many parts of the United States, particularly in regions with hot, dry climates. Protecting your home and family requires a proactive approach to homeowners insurance. By understanding your policy, enhancing coverage, mitigating risks, and knowing how to file a claim, you can safeguard your assets and achieve peace of mind.

Don’t wait until disaster strikes— contact us today to review your homeowners insurance and ensure you’re prepared for the unexpected. Investing in the right coverage and preventative measures can make all the difference in the aftermath of a wildfire.

Providing Peace of Mind Through Proactive Service

Deland, Gibson: A Trusted Choice, Five Star Accredited independent insurance agency. Established in Massachusetts in 1900, Deland, Gibson is a 4th generation family-run insurance agency that has thrived working as a trusted advisor for its client base. We work with individuals and businesses to lower their Total Cost of Risk. We analyze a client’s direct and indirect costs and implement risk reduction plans to address areas of business, hazard, or strategic risk.