Homeowners Insurance in Wildfire-Prone Areas: What You Need to Know

Statistically, wildfires have become more frequent and intense, especially in states like California, Colorado, Arizona, and parts of the Pacific Northwest. Even if you’re not in one of those areas, the risk of wildfires grows everywhere that is experiencing more extreme weather and dry spells. Homeowners face increasing risks—not just to their safety, but also to their financial well-being. If you live in or are moving to a wildfire-prone area, understanding how homeowners insurance works is more important than ever.

From rising premiums to policy non-renewals, navigating the insurance landscape can be daunting. It makes more sense than ever to know how you are covered for such moments. Here’s what you need to know to protect your home, your belongings, and your peace of mind.

1. Wildfires and Insurance: The Growing Risk

Wildfires are now a year-round threat in many parts of the U.S., driven by climate change, drought, and expanding development into wildland areas. According to the National Interagency Fire Center, tens of thousands of structures are destroyed or damaged by wildfires each year.

Insurers are responding to the growing risk by tightening underwriting standards, increasing premiums, and in some cases, pulling out of high-risk markets altogether. That makes it more important than ever for homeowners to understand their coverage—and their options.

2. Standard Homeowners Insurance Usually Covers Wildfire Damage

The good news: Most standard homeowners insurance policies do include coverage for wildfire damage under the dwelling and personal property portions of the policy. This means that if your home or possessions are damaged or destroyed by a wildfire, your insurance should help cover the cost to repair or replace them.

Covered areas typically include:

• The structure of your home (dwelling coverage)

• Detached structures, like garages or sheds

• Personal belongings, such as furniture, electronics, and clothing

• Additional living expenses (ALE), if you’re forced to evacuate or relocate temporarily
  

However, just because it’s “covered” doesn’t mean you’re fully protected. That’s where details matter.

3. Coverage Limits and Gaps: What to Watch Out For

If you haven’t reviewed your policy recently, now’s a great time. Many homeowners are surprised to find they are underinsured, especially when rebuilding costs surge after a major fire in their area.

Key things to check:

• Dwelling coverage limit: Is it enough to fully rebuild your home at current construction costs?

• Replacement cost vs. actual cash value: Replacement cost pays to rebuild without deducting for depreciation—this is the better option.

• Personal property limits: Are valuables like jewelry, art, or electronics adequately covered?

• ALE (Loss of Use): Does your policy cover long-term displacement, and for how much?
  

Talk to your insurance agent or provider to adjust these limits based on your current needs and conditions.

4. What If You’re Dropped or Denied Coverage?

Unfortunately, in high-risk wildfire zones, insurers may refuse to renew existing policies or decline new applications altogether. If this happens, you still have options:

A. Shop Around

Not all insurers assess risk the same way. Some specialize in high-risk areas and may offer competitive coverage with wildfire-specific protections.

B. State FAIR Plans

Most wildfire-prone states offer a FAIR (Fair Access to Insurance Requirements) Plan, which provides basic fire insurance when you can’t get coverage elsewhere. These plans are typically limited in scope and may not include liability or theft protection—so many homeowners pair them with a secondary “wraparound” policy.

C. Surplus Lines Insurance

Some non-admitted insurers, often referred to as “surplus lines” carriers, operate outside the standard regulatory framework and may offer wildfire coverage when others won’t. While they can be more expensive, they can be a lifeline in hard-to-insure areas.

5. Steps You Can Take to Reduce Risk—and Maybe Save Money

Some insurers offer discounts or incentives for wildfire mitigation. Even if they don’t, taking these steps can help protect your home and may help with future insurability.

Fire Risk Mitigation Tips:

• Create defensible space: Clear flammable vegetation 30–100 feet around your home.

• Fire-resistant materials: Use metal or tile roofs, tempered glass windows, and non-combustible siding.

• Screen vents and enclose eaves to prevent embers from entering your home.

• Install spark arresters on chimneys and stovepipes.

• Keep gutters and roofs clean from leaves and debris.
  

In some states (like California), insurers are now required to offer discounts for certain mitigation actions, so be sure to document and report any improvements you make.

6. Be Prepared Before You File a Claim

If a wildfire hits, you’ll need to act quickly—and clearly. Here’s how to prepare in advance:

• Document your home and belongings: Photos and videos of each room, receipts, and serial numbers can help expedite claims.

• Keep digital copies of your policy and insurance contact info somewhere accessible (like cloud storage).

• Know your evacuation plan: Being able to get out quickly with essentials—including documents—can make all the difference.
  

7. Final Thoughts: Knowledge is Protection

Owning a home in a wildfire-prone area doesn’t mean you have to live in fear—but it does mean you need to be proactive. Insurance is a crucial part of protecting your financial future, and in the current landscape, understanding your policy is just as important as having one.

Whether you’re reviewing your coverage, improving your home’s fire resistance, or shopping for a new policy after a non-renewal, staying informed is your best defense.

Quick Checklist:

• Review and update your coverage limits
• Ask your insurer about wildfire mitigation discounts
• Know your options if you’re dropped
• Document everything before disaster strikes
• Stay updated on your region’s risk and evacuation procedures

Need help understanding your current policy or comparing providers? Consider contacting a licensed insurance agent who specializes in wildfire-prone regions, and speak with more than one, if you can—they can be your best ally in navigating this complex and changing terrain.