Fire Insurance in High-Risk Areas

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Fire Insurance in High-Risk Areas

Wildfires are becoming more common and more severe. In states like California, Colorado, Oregon, and others, the wildfire season is becoming increasingly long, making it important for homeowners in fire-prone areas to take steps to protect themselves against these disasters.

While homeowners insurance offers important protections for homeowners, those that live in fire-prone areas may have a difficult time finding affordable insurance policies to protect against wildfires.

Fortunately, though, there are still some options available for homeowners that live in these high-risk zones.

Here’s everything you need to know about finding fire insurance in high-risk areas.

What Does Homeowners Insurance Cover?

A typical homeowners insurance policy covers your home, its detached structures, and your personal belongings against a variety of hazards, including fires and wildfires.

Home insurance policies include several different coverages — each of which offers a layer of protection to help you recover if your home is destroyed by a wildfire.

These coverages include:

  • Dwelling coverage: Dwelling coverage can help pay to repair or rebuild your home’s structure if it is damaged or destroyed by a fire (or other covered perils).
  • Other structures coverage: Whereas dwelling coverage covers your home’s primary structure, other structures coverage can help pay to repair your home’s detached structures, like a shed or detached garage, after a fire.
  • Personal property coverage: Personal property coverage can help pay to replace your personal belongings if they are destroyed by a fire. This also covers belongings that aren’t located inside your home.
  • Additional living expenses (ALE) coverage: ALE coverage, also called loss of use coverage, helps you pay for temporary living expenses if you are forced to leave your home due to a fire or another covered disaster. This coverage may also apply if you are forced to leave your home due to an evacuation order.

Together, these coverages can offset many of the expenses that may arise after a fire damages or destroys your home.

What is a High-Risk Home?

When you shop for home insurance, insurers take several factors into account to determine how much risk they would be taking on if they insured your home. Depending on your risk factors, your home insurance premiums may be very expensive, or in some cases, insurers may refuse to offer coverage at all.

There is no clear definition of a high-risk home as each insurance company uses its own criteria to assess risk. In some cases, you may be denied coverage by some insurers while others are more willing to write a policy.

For example, if you live in a fire zone and your home is located near a forest, you would have a more difficult time finding affordable coverage than someone who lives in the same area but away from any forests or other fuel sources.

How to Get Homeowners Insurance in a Fire-Prone Area

If you live in a high-risk area and are having trouble finding affordable homeowners insurance, there are a few other options for covering your home against fires.

Fair Access to Insurance Requirements (FAIR) Plans

FAIR Plans are available in every state and provide coverage for homeowners who aren’t able to find home insurance in the private market due to their home’s location. In addition to fire, FAIR Plans cover other hazards, like vandalism and windstorms.

However, while these plans do offer coverage against fires and other disasters, they often do not offer some other essential coverages, including liability, medical payments, and in some cases, loss of use coverage.

FAIR Plans are often very expensive and designed to offer temporary coverage, so homeowners should continue shopping for insurance in the private market to try to find an affordable, more comprehensive insurance policy.

Surplus or Excess Lines Carriers

Surplus or excess line carriers are insurance providers that cover risks that standard insurance policies refuse to cover. If you can’t find home insurance through the private market due to your fire risk, this may be an option for you.

These carriers typically offer much more expensive policies than standard carriers, though, making this option a last resort for homeowners that can’t find coverage elsewhere.

Premier Carriers

Premier carriers offer home insurance for high-value and high-risk properties. They may even provide additional coverage benefits like fire prevention and firefighting services.

To qualify for one of these policies, though, your home typically needs to exceed a minimum value.

How to Protect Your Home Against Wildfires

Homeowners in high-risk fire zones should take extra steps to protect their homes against wildfires. Doing so not only decreases the risk of your home being destroyed by a wildfire, but in some cases, it can also help you find more affordable home insurance rates.

To protect your home against fires, take these steps:

  • Install a sprinkler system to hydrate the exterior of your home and help prevent ignition.
  • Removing combustible items from around your home and its detached structures.
  • Trim trees and plants, to create more space between vegetation.
  • Regularly clean your gutters and remove debris from your roof.

If possible, you should also consider using fire-resistant building materials to harden your home.