Wildfire Insurance Guide

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Wildfire Insurance Guide

Wildfires in California and across the United States are becoming increasingly more frequent. These disasters can cause serious property damage, and to protect themselves from suffering significant financial losses, homeowners need wildfire insurance to protect their homes and personal property.

While wildfire insurance for homeowners in fire-prone areas can be expensive and hard to come by, there are a few options available to help homeowners find affordable coverage.

Here’s everything you need to know about wildfire insurance, including what it is, what it covers, how much it costs, and more.

What is Wildfire Insurance?

Wildfire insurance is an umbrella term that includes several types of coverages to protect your home, personal belongings, vehicle, and other assets against damages.

There isn’t a singular insurance product called “wildfire insurance,” but there are several different kinds of insurance policies that will protect your home, car, belongings, and assets against wildfire damage.

Home insurance

Homeowners insurance provides coverage for your home and personal belongings if they are damaged by a wildfire or any other covered peril listed in your home insurance policy.

Home insurance includes dwelling coverage, which covers the physical structure of your home, and other structures coverage, which covers any detached structures, like a detached garage or a shed.

It may also include loss of use coverage, also called additional living expenses coverage, to help you cover temporary living expenses while your home is being rebuilt or repaired.

Renters insurance

Renters insurance provides coverage against fire damage for your personal belongings after a wildfire. It also protects against smoke damage and may include loss of use coverage to help you cover temporary living expenses.

Condo insurance

Like home insurance, condo insurance protects both the structure of your condo and your personal belongings against any fire damage. Your policy may also include additional living expenses coverage to help you temporarily relocate after a wildfire.

Auto insurance

Auto insurance policies typically include both collision coverage and comprehensive coverage. Comprehensive coverage covers damages to your car that result from anything other than a collision, which includes wildfire damage.

How Much Does it Cost?

Wildfire insurance mostly refers to the coverage against fire damage included in home insurance policies, which means your total cost for wildfire insurance will be determined by several factors, including:

  • Location
  • Home replacement cost
  • Coverage limits
  • Optional endorsements
  • Claims history
  • Home safety features
  • Age and construction of home

According to the Insurance Information Institute (III), the average cost of homeowners insurance in the United States was $1,249 in 2018.

Does Homeowners Insurance Include Wildfire Coverage?

Most homeowners insurance policies provide protection against fire and smoke damage, which includes wildfire damage.

If your home is destroyed by a wildfire, your homeowners insurance will typically help you cover the costs to rebuild your home and replace your personal belongings up to the coverage limits stated in your policy.

Here’s an overview of how your home insurance policy can help mitigate the damages caused by a wildfire.

Dwelling and other structures coverage

Together, dwelling coverage and other structures cover the structure of your home as well as detached structures like a shed, deck, detached garage, or fence. To ensure your home is fully covered, your coverage limits should be equal to the replacement cost of your home. This is the amount required to rebuild your entire home to its original quality if it is completely destroyed by a wildfire.

Personal property coverage

The personal property coverage included in your home insurance policy covers your personal belongings against wildfire damage. This includes your furniture, appliances, electronics, clothes, and valuables.

Loss of use coverage

Loss of use coverage can help you cover temporary living expenses if you are forced to relocate after a wildfire destroys your home. This can include temporary accommodations, meals, and other expenses that you incur while your home is being rebuilt.

Your loss of use coverage is typically equal to 20% of your dwelling coverage limit. If you live in a fire-prone area, though, you may consider purchasing more loss of use coverage to ensure your temporary living expenses are covered if you have to flee due to a wildfire.

FAIR Plans

Homeowners that live in wildfire-prone areas may find it difficult to find affordable home insurance policies. People that live in these areas are often able to purchase home insurance via a FAIR (Fair Access to Insurance Requirements) Plan.

FAIR Plans are available in certain states in areas where standard home insurance policies may not be available due to increased risks of certain natural disasters, like wildfires. They are state-mandated plans that are funded by multiple private insurance companies so that they each carry the risk of insuring your home.

To be eligible for these plans, you typically need to have been rejected by private insurers at least three times.

FAIR plans are typically more expensive than standard home insurance policies, so they should typically be a last resort option in the event that you can’t find insurance elsewhere.

Making a Wildfire Insurance Claim

Keep these tips in mind when filing a home insurance claim after a wildfire:

  • Contact your insurer as soon as possible: After a wildfire damages your home, contact your insurance provider to file your claim as quickly as possible. It’s important to get this process started quickly so that you receive reimbursement as soon as possible.
  • Take photos and videos: After a wildfire has passed and it is safe to enter your home, be sure to document all of the damages. Take photos and videos of your home and personal belongings to provide your insurer with proof of damages.
  • Track your expenses: If you have to temporarily relocate after a wildfire, make sure to track your living expenses and keep all of your receipts so that you are properly reimbursed.

In most cases, you have to make a claim within 60 days of the damages. If your claim is denied or you receive less than you should, you can always file an appeal with your insurance company to have your claim reviewed.

Proactive Ways to Protect Your Home

While wildfire insurance can help you cover replacement and repair expenses following a wildfire, homeowners should take precautions to protect their homes against wildfires and mitigate the damages caused by these disasters.

Here are a few ways to proactively protect your home against wildfires:

  • Install a roof sprinkler system to hydrate the exterior of your home and reduce the chances of ignition.
  • Remove flammable items from around your home, and trim bushes and trees surrounding your home to create a defensible space.
  • Use fire-resistant building materials, like dual-pane windows and fire-rated doors, when possible to make your home less vulnerable to wildfire damage.

It’s also important to create an evacuation checklist to ensure you and your family knows what to do if there is a wildfire in your area.