According to a Corelogic report from 2019, 775,654 residential homes were at risk for wildfire damage across 13 western states. According to Corelogic’s 2019 report, there were 775,654 homes in 13 western states that could be damaged by wildfires. By 2020, this number would increase to 4.5 millions homes.
Wildfires destroyed more than 17,700 houses in 2020. Californian homes accounted for the most losses. 3 Insuring your home against the financial effects of a wildfire is a wise move.
Takeaways from the Key Notes
- You may be covered by your homeowner’s insurance policy. Many policies include wildfires in the same way they cover other types of fires such as kitchen, electrical and lightning fires. You should check to make sure.
- It’s vital to ensure you have adequate insurance if your home is located in an area at high risk for wildfires.
- In areas where wildfires have been catastrophic, insurance companies are refusing to renew homeowner policies. Some states declare a moratorium for non-renewals at least one year following a wildfire.
What is Wildfire Insurance?
Wildfires are usually covered by standard home insurance policies from insurers approved by the state. Things are still changing. Insurers in high-risk areas have increased premiums since 2017 due to the increase of wildfire damage in the west. It’s crucial to check the policy to see what is covered or excluded.
The insurance coverage can vary, but should typically cover damages caused by smoke and fire.
- The structure or building of your home
- Additional structures such as a shed, garage or apartment on the property
- Landscape, pool area, patio and content
- Debris removal
- Personal belongings or contents in the home
- The upgrade to the building code may be optional or standard
- Additional Living Expenses
What Will Your Insurance Company Pay In The Event Of A Wildfire?
You’ll want to make sure you understand your policy and its limits. If you live in a fire-prone area, make sure that you are adequately insured. This means you should receive enough money if you lose your home to rebuild it with the same features and at current prices.
Replacement Cost Value or Extended Replacement Cost
Replacement cost value is the type of insurance that will allow you to rebuild for current new-build costs. It covers your actual home rebuilding cost, but up to a certain limit.
O’Neill advises asking a general contractor or realtor what the cost per square foot of construction is currently in your area. Multiply that by the square footage of your home to ensure you’re covered.
Some states offer policies that guarantee/extend replacement costs, which will replace your home no matter how much the building materials or labor cost after a disaster spikes as people try to rebuild everything at once. This coverage is usually more expensive.
In some areas, the building codes have also changed significantly over the last 30 years. People who are shopping for insurance in areas prone to wildfires should look into policies that provide coverage for updated building code coverage when rebuilding. You will have enough money for your new home to meet today’s building codes.
Another item to consider is the loss-of-use insurance, also known as additional living expenses coverage. This coverage is affordable and pays for the costs of hotels, food and other expenses incurred if you are unable to live in your home due to an evacuation or rebuild.
Enjoy Additional Peace of mind
Wildfire Response Endorsement and Wildfire Defense Services can be a useful addition to your existing insurance policy. It may make sense in wildfire-prone regions to pay for a retainer to have a private firefighting department on standby to help you if there is a fire at your house. Costs vary by insurance company. State Farm recently included this coverage in all policies.
State Farm will stop accepting new home insurance applications in California on May 27, 2023. This includes all business and personal property and casualty policies. This change did not affect existing policies or personal auto insurance. 6
This coverage is available when wildfires threaten your home. A class 6 fire engine (which includes wildland brush truck) will be sent to harden the house, close windows, doors, clear space that can be defended, install sprinklers and apply flame retardant foam.
Where can you get wildfire insurance?
Check with your insurer to see if they can provide wildfire coverage if it’s not included in your policy. You may be able find FAIR plans if you are unable to obtain coverage because you live in a high risk area. This is a state mandated program that allows fair access to insurance.
Insurance companies admit that in many places near areas where there have been many homes destroyed by wildfires they are not renewing policies when allowed. In many states, insurance commissioners will declare a moratorium for non-renewals at least one full year after a major wildfire. You can appeal a decision that you were not renewed by an insurance company.
Contact your state’s Insurance Commission to request assistance. O’Neill advises consumers to document their efforts (take before-and-after photos, keep receipts from contractors and materials) to protect against wildfires. They should also reach out to the agent and share documentation.
You can buy home insurance through an admitted insurer if you are not renewed. However, this will cost between three and six times as much. You can buy insurance through your state’s insurer-of-last resort. This pooled high risk individuals is the most expensive.
O’Neill also says that homeowners in high-risk zones should record their homes and contents every year (not just photographs, since photos can be photoshopped and are less reliable). Open drawers, wardrobes, closets and storage areas in each room to record your possessions. Noting the serial number and make and model of electronics and high-value items is useful. Save a video copy to cloud storage, such as Google Drive or Dropbox.
How are claims settled in wildfire insurance cases?
In order to receive compensation, the insured must submit a claim within 15 days after the fire. The claimant is required to provide photographs of the damage. While clearing up debris and cleaning is important, do not destroy any evidence of the damage or fire until your claim has been processed.
Can an insurer deny a claim for a wildfire?
Insurance companies may deny a claim when they believe the damage claims are excessive or exaggerated, or the homeowner’s insurance policy is in arrears. Maintain your insurance payments!
What is a wildfire smoke claim?
You can submit a smoke damage claim if your home was not destroyed by wildfire, but it was damaged by smoke, ash or soot from wildfires within 10 miles. Smoke and soot damage your home’s interior, exterior and contents. You may have a smoke claim if you are able to prove that the wildfire caused these damages.
The Bottom Line
Your homeowner’s policy should cover wildfires in most areas that are not prone to them. The best insurance claim to have is to never need to file one. Therefore, it is important to educate yourself about wildfire risk, harden your home, and manage vegetation around your home to create a defensible area.
Adsrocks’s writers are required to use primary resources to support their writing. White papers, government statistics, original reporting and interviews with experts in the industry are all examples. Where appropriate, we also refer to original research by other reputable publishers. Our editorial policies will tell you more about our standards for producing accurate and unbiased content.
- CoreLogic. “2019 Wildfire Risk Report.”
- Verisk. “Wildfire Risk Analysis.”
- Headwaters Economics. ” Wildfires Destroy Thousand of Structures Every Year.”
- https://madronus.com/about/
- State Farm. State Farm.
- State Farm. State Farm General Insurance Company. ” State Farm General Insurance Company California New Business Update.”
