Wildfires and home insurance: What you need to know

Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s.

Ashlee, a former managing editor, insurance, at QuinStreet, is a journalist and business professional. She earned an MBA in 2014 with a concentration in finance. She has more than 15 years of hands-on experience in the finance industry.

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Damage from fire, smoke and ash is typically covered under most home insurance policies, including wildfires. However, in some parts of the country where wildfires are an annual risk, home insurance may be difficult to obtain or very expensive.

Home insurance covers the structure of your home, personal property and additional living expenses after a wildfire.

To be properly insured for wildfire damage, it’s important to carefully review your replacement cost coverage and discuss with your insurance agent or representative what you need to know about wildfires.

Learn everything you need to know about wildfire insurance and claims below.

Key Takeaways

Does home insurance cover wildfires?

Homeowners insurance covers fire damage, including wildfires. A number of coverages apply to the damage caused by a wildfire.

Dwelling coverage will cover any damage to your home’s structure and any attached structures like a garage or deck. The other structures portion will cover anything not attached to the house, like a shed or fence.

Personal property coverage applies to all of the contents of your home, including furniture, electronics, linens, clothing and more.

Finally, additional living expenses coverage will help to cover the costs of living elsewhere if a wildfire forces you from your home.

Is smoke and ash damage covered?

Yes, home insurance will cover damage caused by smoke and ash to both the structure of your home and your personal property.

If your home gets exposed to smoke and ash, be sure to have the house and your personal items inspected and then cleaned or treated and restored to their original state.

Here is a checklist for how to document smoke damage that will help support your wildfire claim, according to the non-profit consumer advocacy group United Policyholders:

Understanding interdependent risk from your neighbor’s home

We asked Howard Kunreuther, co-director of the Wharton Risk Management and Decision Processes Center at the Wharton School, University of Pennsylvania, to comment on issues relating to wildfire and homeowners insurance. Dr. Kunreuther is author of The Ostrich Paradox: Why We Underprepare for Disasters.

Q: Why are wildfires categorized as an interdependent risk when it comes to insurance?

A: The risk of wildfire damage one homeowner may face is determined, in part, by whether other homeowners nearby have protected their property against wildfire damage. That is what’s known an “interdependent risk.” Say, for example, one homeowner does not create defensible space by removing brush and dead plants around their home. When wildfire endangers that community, embers that take flight from that house may cause a neighboring house to catch fire too. 

Q: Given the interdependent nature of wildfire risk, is there any coordination required between neighboring homes when filing insurance claims?

A: It is helpful if homeowners coordinate and work together to maintain defensible space around their properties. But each neighboring homeowner will need to make independent claims on their own insurance policies. No homeowner has a claim for damages against another homeowner’s insurance policy if embers from a neighbor’s house caused their home to catch fire.

Tips for filing homeowners insurance claims after wildfires

Here’s what to do if you have to file a homeowners insurance claim after a wildfire

Record damage to all property

Photograph the damage to your home and personal property. Keep all damaged belongings in case an insurance adjuster needs to visit to inspect your property and verify claims.

File a claim immediately

File your claim as soon as possible. To expedite the approval of your claims, begin the process quickly after you discover destruction to your property by contacting your insurance provider. There is a time limit for filing claims so confirm the deadline to file claims with your insurance company before it is too late.

Make temporary repairs

If it’s safe to do so, make any repairs you can to prevent further damage. Cover windows and any holes in the home with tarps or plywood. Be cautious; never enter a home that is not structurally sound after a fire. Wait for officials to clear you to enter the home.

Check the condition of items after they are cleaned

If you believe an item is too far gone to be cleaned up, United Policyholders recommends insisting on a fair replacement value settlement for that item. Additionally, you can claim the replacement value in addition to the cleaning cost of your belongings that are not in satisfactory condition after they’ve been cleaned.

QuickTake

Tips for dealing with insurance after a wildfire

It’s important to stay on top of your insurance claim after a wildfire and to keep in mind that with widespread damage, the process might be slow. Provide all requested documentation and respond to requests from the insurance company quickly to keep things moving smoothly.

Other tips from the California Department of Insurance:

Your vehicle is covered for fire damage under your auto insurance policy if you carry comprehensive coverage. There is no coverage for your car under your home policy, even if it burns while in your garage.

Beware of home repair fraud

Many homeowners, who must repair or rebuild following wildfires or other catastrophes, have become the unsuspecting victims of home repair fraud.

The industry organization Insurance Information Institute offers these tips to help homeowners avoid becoming victims of fraud.

In addition, you should beware of a common fraud scheme in which a “contractor” convinces you to shell out a large deposit before beginning work. Frequently, the job is started, but not completed. Before hiring a home repair contractor, investigate the credentials, background and testimonials of the previous work of the contractor.

Many areas require contractors to be licensed; check with your state’s contractors licensing board to verify that someone is licensed before you hire him or her.

Fire protection: How to protect your home from wildfires

Homeowners who live in areas susceptible to wildfires can take steps to reduce the risk of damage.

Here’s what you can do to guard against wildfires and prevent damage to your home:

Wildfires can destroy neighborhoods and homes, but by taking precautions, you might be able to reduce the damage or even save your home.

Penny is an expert on insurance procedures, rates, policies and claims. She has extensive knowledge of all major insurance lines -- auto, homeowners, life and health insurance. She has been answering consumers’ questions as an analyst for more than 15 years and has been featured in numerous major media outlets, including the Washington Post and Kiplinger’s.

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