Does homeowners insurance cover wildfire damage?

A standard homeowners insurance policy covers damage caused by fire and smoke, including wildfires. If your home is destroyed by a wildfire, homeowners insurance can pay to rebuild your home or replace any damaged belongings. Your policy can also cover the increased cost of living, like temporary lodging or restaurant meals, while your house is being rebuilt. 

However, homeowners insurance is getting more expensive and difficult to find in residential areas where wildfires are common, including much of California and Texas. 

If you live in a fire-prone area, be sure to check your homeowners insurance policy to see if it has any coverage restrictions related to wildfire damage. If your homeowners insurance rates went up or you’re not able to find adequate wildfire insurance, clearing vegetation from your property and other fireproofing measures can lower your rates and make your house more insurable.

Are wildfires covered by homeowners insurance?

In the event your home is destroyed by a wildfire, homeowners insurance can help get your life back to normal. Your policy provides coverage against wildfire damage in three key areas: 

1. The structure of your house

If your home is fully or partially destroyed by a wildfire, your policy’s dwelling coverage can pay to rebuild or repair your house and remediate any smoke damage. If the destruction causes a pile of debris on your property, homeowners insurance can pay to remove it. 

In the event of a home damage claim, your dwelling coverage limit is the maximum amount your insurance company will pay out for rebuild or repair costs. Your dwelling coverage limit should be equal to your home’s replacement cost, which is the amount it would cost to rebuild your house from the ground up. Your replacement cost is based on factors such as local labor and construction costs as well as the style and size of your home.

2. Your personal belongings

Homeowners insurance will also cover the cost of repairing or replacing any damaged items or furnishings — like furniture, clothing, and jewelry — up to the personal property coverage limit in your policy. 

Your personal property coverage limit is generally set at 50% of your policy’s dwelling limit, but most insurance companies will let you adjust your coverage levels to suit your needs.

3. Your additional living expenses

If your home is set ablaze and you’re forced to evacuate, your policy’s loss of use coverage can reimburse you for living expenses while you’re away from home, including:

• Hotel or temporary rental

• Restaurant meals

• Laundry and dry cleaning

• Transportation costs

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How to get home insurance in wildfire areas

As wildfires continue to get larger and more costly for the insurance industry, coverage denials and policy cancellations have become the norm. If you live in a fire-prone area and you’ve been repeatedly denied homeowners insurance, you have a few options to get the coverage you need.

Your state’s FAIR plan

Most states offer what is referred to as a Fair Access to Insurance Requirements Plan, or FAIR Plan. This is a type of last-resort homeowners insurance for residents who can’t find wildfire coverage on the open market. 

These policies provide less coverage than a typical homeowners insurance policy and are generally more expensive, so FAIR Plans are only recommended if it’s your only coverage option. 

Excess and surplus lines insurance

Your other option is to purchase coverage through an excess and surplus lines insurer. Also known as E&S insurance, this is a type of property insurance that covers risks that are too high for a regular insurance company to take on. This includes homes with extreme wildfire risk. 

Since E&S insurance companies take on more risk than regular insurers, this type of coverage is typically more expensive than standard homeowners insurance.

High-value homeowners insurance

If your home is worth more than $1 million, consider wildfire coverage through a premier insurance company like Chubb or AIG. In addition to covering wildfire damage, premier insurance companies often provide policy perks like wildfire mitigation and private firefighter services.

12 ways to prevent wildfire damage

Homeowners insurance rates are based largely on your home’s location and any potential hazards it faces. If your property is full of dry leaves and pine needles or you have trees or foliage next to your home, you may be charged astronomical premiums or denied coverage altogether. 

By taking the following steps, you’ll lower your home’s risk of wildfire damage and lower your home insurance rates.

• Make sure your home has a six inch ground-to-siding clearance

• Consider noncombustible siding and roofing

• Clear debris from your roof

• Cover your home with Class A roofing, like concrete or clay roof tiles

• Clean your gutters regularly

• Use nonflammable fencing and gates

• Protect your windows using multi-pane or tempered glass materials 

• Make sure all windows are closed if a wildfire is in close range

• Use deck boards that comply with local building regulations for wildfire-prone areas 

• Remove anything flammable from underneath your deck

• Remove any brush or shrubs from underneath trees on your property

• Prune branches that extend over your home

• Remove any dead vegetation near your home

In the unlikely event your property is impacted by a wildfire, you’ll also want to consider the sources of fire suppression on your property.

While we don’t recommend fighting large fires yourself, make sure your garden hose is long enough to reach any part of your property to put out any potential small fires. If you don’t live near a fire hydrant, consider other sources of water the fire department can access, such as a lake or pool. If you don’t have a water source, consider purchasing a water storage tank or wildfire sprinkler system for your property.