Does homeowners insurance cover wildfires?

By Jen Phillips

As wildfires tear through Northern California, the previously reported cost of the already high 2017 wildfire season continues to unfold. The U.S. Forest Service indicated that the cost of the 2017’s wildfire season already exceeded $2 billion, amounting to the most expensive wildfire season ever. With the onset of the recent wildfires raging through Northern California, they not only take a tremendous toll on property and wildlife, but the costs associated with it are astronomical.

Wildfire statistics

• 2015 was the most destructive year on record for wildfires according to the Insurance Information Institute. A record of more than 10 million acres were burned by wildfire that year. This being said, the 2017 season has not yet ended.
• In May of 2016, Fort McMurray in Alberta, Canada saw a wildfire that may be the costliest natural disaster ever for insurers in Canada; more than 1,600 buildings were destroyed in the fire.
• On average, around 100,000 wildfires are recorded each year in the United States.
• Wildfires generally occur in forested areas or grasslands, and homeowners who live in the mountains or foothills are particularly at risk.
• Drought conditions and high temperatures contribute significantly to increased risk of wildfires.
• Although some wildfires are caused by nature, such as lightning strikes, the National Park Service estimates that 90 percent of the wildfires in the United States are caused by humans.

Will my homeowners insurance policy cover a loss due to a wildfire?

Generally, the answer is yes, but check your homeowners insurance policy. Some insurers might not include wildfires as a “covered peril” in areas that are prone to repeated wildfires. If you live in a state where wildfires are more common, your homeowners premium will most likely reflect that increased risk.

If you do experience a loss due to a wildfire, your homeowners insurance policy will most likely cover the cost of repairing your damaged home or rebuilding it, up to the limits outlined in your policy. It will also likely cover the cost of your belongings inside your house.

If you live in an area or state that is at a higher risk for wildfires, it’s important to make sure that your home inventory is kept up to date, and is stored in a safe location — consider keeping a copy in a secure digital location “in the cloud” so that even if your computer or laptop are damaged, you’ll still be able to access a copy. A safe deposit box or a fire-resistant safe are two options for physical copies.

Your homeowners insurance policy might also help pay for temporary housing or living expenses if you need to live elsewhere while your home is being repaired or rebuilt. Check your policy or talk to your agent to learn about any possible coverage limits and exclusions.

Losing a home to a wildfire can be a frightening and emotional experience. Knowing what your homeowners insurance policy covers and being prepared with a home inventory can help with your peace of mind, particularly if you live in an area that is at a higher risk.

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