Is Wildfire Damage Covered by Homeowners Insurance?

Whether a home is covered for wildlife may be determined by location.

Many parts of the United States are experiencing a wildfire crisis. The Bootleg Fire beginning in early July engulfed more than 300,000 acres in southern Oregon, while The Dixie Fire became the 15th largest wildfire in California history. And these are just a few of the many recent devastating fires.

A wildfire can be a terrible tragedy for homeowners, putting their safety at risk, destroying their possessions, and leaving them with no place to live. Property owners need to ensure they are protected against financial losses from these fires, and that means finding out if their homeowners insurance covers damage from a wildfire.

Do homeowners insurance policies cover wildfire damage?

In general, homeowners insurance policies provide coverage for damage caused by fire -- and that includes wildfires. However, in some areas that are especially prone to wildfires, insurers may exclude this type of coverage from policies. In those situations, fires from other causes -- such as faulty appliances or an electrical short -- would still be covered, but wildfires would not.

For example, in many parts of California, insurers commonly exclude wildfire coverage from a standard home insurance policy. That means property owners may not have coverage in some of the areas where this protection is especially important.

Individual homeowners will need to check the exclusions on their insurance policy to see if their insurance company specifically states that it will not cover fire or smoke damage from wildfires. Most often, this is an issue in high-risk areas. Homeowners who don't have a copy of their policy or who are not certain how to understand their exclusions should contact their insurers directly to ask about wildfire protection.

What if home insurance excludes wildfire coverage?

If a homeowner lives in an area where wildfire protection is excluded, they will likely need to purchase an separate wildfire insurance policy.

This is crucial, because without wildfire coverage, homeowners might be left without insurance to pay to repair or replace their home or possessions in the event a wildfire destroys their property. Without insurance to help pay the bills, most people cannot afford to replace all they own and rebuild their home.

Some specialized home insurance companies may offer standalone wildfire policies. These are often referred to as "surplus lines policies," which is a name given to high-risk insurance policies offered by specialized insurance carriers that standard insurers won't offer. There are typically specialized rules for these policies, such as a requirement that the insured homeowner pay premiums for a certain length of time even if they cancel coverage.

Homeowners may also be able to gain access through state-run insurance programs. Called Fair Access to Insurance Requirements (FAIR) Plans, these offer protections for homeowners who can't get wildfire coverage elsewhere. For example, FAIR Plans in California cover brushfire damage for properties valued up to $1.5 million. These plans may also be more expensive than standard home insurance.

For those who do not have wildfire coverage, it is important to explore these options and get covered before a fire occurs. Homeowners should make sure they have dwelling coverage, protection for personal property, and loss-of-use coverage to pay for expenses they may incur if wildfire damage affects their ability to use their property.