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Best home insurance for wildfires

Compare wildfire coverage, costs and how to make a successful claim after a fire.

As wildfires continue to burn across California and the West Coast, thousands of homes are experiencing total loss or damage. If your home suffers damage, your home insurance policy may offer wildfire coverage. The level of coverage you’ll receive varies depending on factors including where you live and the value of your home.

What’s the best insurance coverage for wildfires?

To make sure you’re fully protected against wildfires, consider what your home insurance covers, and which additional policies and add-ons can make sure you have adequate protection.

Home insurance

A standard homeowner’s policy typically covers damage from wildfires. Your insurance company will pay to rebuild or replace the structures of your home, including any outbuildings like a garage or shed.

A cash value policy will replace your home and contents, minus any depreciation. Alternatively, replacement value coverage covers costs up to the amount you select when purchasing your policy, any additional costs will need to paid out-of-pocket. For example, if your policy states total replacement value coverage up to $250,000, but it costs $300,000 to rebuild your home, you’ll be left with $50,000 in out-of-pocket costs. This type of policy is more expensive, but is less likely to leave you underinsured.

Some policies allow you to opt into extended replacement cost or guaranteed replacement cost for an additional charge, ensuring any extra costs are covered. That might mean you could get extra money to not just rebuild or repair your home but to also add on green upgrades or repair with newer or safer materials.

Personal property coverage

Coverage for your personal belonging should be covered under your standard homeowner’s policy. But first check your policy for any personal property limits that apply to specific items, like jewelry. And if you need extra coverage for high-priced valuables, consider a valuable personal property add-on that allows you to insure specific items at their appraised value.

  • If your items are covered under replacement cost, they may be replaced with new items of equivalent value. For example, that means you’d get $500 to buy a new replacement for your older TV that was damaged, even though the TV’s no longer worth the $500 you paid for it.
  • If you have an actual cash value policy, your possessions may be replaced or repaired at their current market value, which could leave you underinsured for items that depreciate over time. For example, that means you’ll only get $100 to replace the now-used TV you bought new for $500 a few years ago.

Loss of use coverage

If you have to relocate during the rebuilding or repair of your home, this coverage can help cover the cost of temporary living arrangements, like a hotel. This coverage is included in your homeowners policy, but generally has low coverage limits. If you expect high living expenses while you’re out of your home, increasing your limits for a few extra dollars a year may be worth the cost.

Car insurance

To ensure your car is covered if it’s damaged or destroyed in a wildfire, consider opting into comprehensive car insurance coverage. You might need this coverage if your car was in the garage or driveway while your home caught fire, for example.

Compare home insurance that covers wildfires

Name Product Storm & water backup Valuable property Enhanced rebuild Homeshare coverage Available states
Lemonade home insurance
Enjoy straightforward pricing, transparent flat fee from this completely digital insurer.
Allstate home insurance
All 50 states
Protect your home and belongings and save even more by bundling insurance with Allstate.
USAA home insurance
All 50 states
Enjoy great rates and wide coverage with USAA. Available to military members and family.
Policygenius home insurance
All 50 states
This online marketplace does most of the work for you, matching you with quotes from 14 highly rated home insurers.
Liberty Mutual home insurance
All 50 states
Invest in affordable insurance that protects your home and your property from damage no matter where you live.

Compare up to 4 providers

How much does wildfire insurance cost?

For context, in 2017, the average homeowners insurance policy cost $1,211 per year, according to the Insurance Information Institute. However, how much you’ll pay comes down to where you live, the price of your home and your personal details. These factors are calculated into your final cost:

  • Where you live. People who live in wildfire-prone areas will generally pay more than people who don’t, all else being equal.
  • The value of your home. The more it will cost to replace your home, the more you’ll pay for insurance.
  • Your policy limits. How much you insure your home and belongings for, and whether you choose a more expensive replacement value coverage or actual cash value coverage will affect your insurance premiums.
  • Optional add-ons. If you up your coverage with add-ons, like extended replacement cost coverage or valuable personal property coverage, or increase your policy limits, you’ll pay more in premiums.
  • Your claims history. If you’ve previously made home insurance claims, you can expect to pay more than a homeowner with a clean claims history.
  • Discounts you qualify for. To help lower your costs, many insurers offer a variety of home insurance discounts. For example, you may qualify for a multi-policy discount for purchasing home and car insurance with the same insurer, or an online discount for buying your policy online.

How do I get wildfire insurance if I live in a high-risk area?

Finding a standard homeowners insurance policy in areas prone to wildfires has become increasingly difficult and expensive, and cancellations and nonrenewals have become an unfortunate consideration.

However, in states like California, insurers are temporarily banned from canceling homeowners’ policies in fire-prone areas. It’s important to note that the ban is only valid until December, 2020, and it’s unclear if it will be extended.

If you can’t find a standard insurer willing to offer home insurance coverage in your area, you can:

  1. Search for high-risk fire insurance policy under your state’s Fair Access to Insurance (FAIR) plan.
  2. Get a referral from your current insurer to a high-risk surplus lines insurer who is willing to take on the additional risk.
  3. Ask your realtor for recommendations for high risk insurers who work in your area.
  4. Contact your state insurance department for a list of insurers who will insure in your city.

How to avoid being underinsured for wildfires

Imagine how devastating it would be to think you were fully covered, only to find out your claim only covers part of your rebuilding costs. This is called underinsurance, and you can avoid it by taking these steps:

  • Keep up with your home’s increasing value. Your insurance coverage doesn’t automatically increase every time your home goes up in value. That’s why it is important to review your policy every year and adjust your coverage amount accordingly. You’ll also want to adjust your contents coverage if you’ve purchased new items.
  • Have a safety net or replacement value coverage. In a perfect world, the amount it costs you to replace your home would be equal to your home’s current value. Unfortunately, the market can be unpredictable. For instance, if a wildfire takes out your entire neighborhood, the cost of local building supplies will likely surge temporarily. A safety net or a replacement value policy factors this in.
  • Don’t cut corners to save on premiums. It may be tempting to insure your home for less than what it’s worth to save money on your premiums, but this can spell disaster. It doesn’t pay to be underinsured, so make sure you are covered for at least the full value of your home and have enough contents insurance to replace your essential belongings.

What’s not covered with wildfire insurance?

There are a few situations where you won’t be covered. Review your policy exclusions to make sure you’re aware of all circumstances when your payout might be denied. Here are some of the most common related to wildfires:

  • There was no flame. If there was no flame, there was no fire. That means you won’t be covered for scorching, burn marks or melting unless there was a flame present on your property.
  • The fire missed your home. You won’t be covered for smoke or soot damage from a nearby wildfire if the flame didn’t touch your home. Some insurers will make an exception if the wildfire reached another building within a certain distance of your home.

How to make a claim after wildfire damage

If you need to make a home insurance claim after wildfire damage, keep these tips in mind:

  • Keep an updated list of your items. You can quicken the completion of proof of loss forms required by your insurance company by having an updated list of your belongings on hand. This way, you’ll be able to take inventory on the property destroyed in a wildfire, and more quickly make your claim.
  • Record the damage. Take note of all items and property damaged in the wildfire, taking pictures where possible before you clean anything up.
  • Make your claim as soon as possible. Call in your claim as soon as the danger has passed. If a wildfire is widespread, your insurance company is likely to be handling a large number of claims at one time, and you’ll want to be high on your insurance adjuster’s list to ensure a timely payout.
  • Save your receipts. If you have to leave your home during repairs, keep all receipts related to your living expenses, such as food and hotel expenses. These receipts will serve as proof for loss of use coverage.
  • Keep a log of all communication with your insurer. Save any email correspondence with your insurance company, and keep a note of adjuster visits, phone calls and what you discussed. It’s unlikely you’ll need this information, but if your claim is denied this correspondence can be useful.
  • Be prepared to wait. Typically claims are delayed when multiple homeowners are all claiming at the same time. Though insurers are typically required to complete your claim in 30 days, you might not get your final decision and payout amount by then.

What if my claim is rejected?

A rejected claim can sting to say the least, but luckily there is a rather generous appeals process. Here’s what you need to do to keep your claim alive:

  • Appeal the denial. Insurers are required by law to have an internal review team that is separate from the original claims department. Their job is to review denied claims to make sure there’s nothing the claims department missed.
  • Contact a lawyer. If you’re still denied after asking your insurer to review your claim, you may look into hiring an insurance claim lawyer. A lawyer can help review the details of your claim and insurance policy to try and get any payouts that are rightfully yours.

Bottom line

Wildfires can devastate your family, finances and home. The right home insurance can help you rebuild, as long as you can find an insurance company that will cover you. Compare your home insurance options to find the right coverage for you and your home.

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