Wildfire Insurance Basics

Wildfires move fast, destroy unevenly, and create huge claim backlogs. Fortunately, unlike floods and earthquakes, wildfire damage is typically covered under standard homeowners insurance—but only if you understand the limits, exclusions, and documentation requirements that insurers lean on during major events.

If you want broader context on how structure coverage normally works, review the breakdown on dwelling coverage before diving into wildfire specifics.

1. What Homeowners Insurance Covers in a Wildfire

Wildfire is a covered peril under almost all HO-3 and HO-5 policies. That means damage from direct flame, ember attack, and most smoke damage should be covered—assuming you can prove the cause and the extent.

• Burned or damaged structure
• Smoke and soot contamination
• Heat damage to roofing, siding, and windows
• Firefighter-caused damage (forced entry, water, demolition)

Smoke damage gets underestimated. It can ruin HVAC systems, insulation, electronics, and fabrics—even when the home looks untouched.

2. What Wildfire Coverage Does NOT Include

Homeowners policies are strong for fire—but not perfect. These exclusions catch people by surprise:

• Landscaping, trees, and fencing (limited or excluded)
• Retaining walls and exterior structures not attached to the home
• Smoke damage in attics or crawlspaces if not properly documented
• Losses caused by evacuation alone (no physical damage)

Some of these gaps can be filled with additional endorsements or separate coverage if you live in a high-risk region.

3. Additional Living Expenses During Wildfire Displacement

Wildfires often trigger mandatory evacuations or leave homes uninhabitable for weeks. Your loss of use coverage pays for temporary housing and increased living costs when the home cannot be safely occupied due to covered damage.

But ALE only applies if your home suffers direct damage. Evacuation alone is not enough in most policies.

4. Documentation Is Everything in Smoke Claims

Wildfire smoke claims get challenged constantly because smoke damage can be invisible without testing. Document everything immediately.

• Photograph soot patterns and residue
• Record HVAC filter condition
• Note strong odor in fabrics, vents, and carpets
• Request air quality or particulate testing if needed

The guide on documenting your home walks through a clean, claim-ready system.

5. Deductibles and Special Limits for Wildfire Damage

Most policies use the standard deductible for fire, but in high-risk regions insurers sometimes apply separate wildfire deductibles. These can be flat or percentage-based.

• 2%–5% of dwelling coverage is becoming common in wildfire zones
• High deductibles apply even on partial damage
• Out-of-pocket costs can be substantial if you’re underinsured

If you have a percentage deductible, re-check your limits—your out-of-pocket share is tied to your rebuild cost, not the damage amount.

6. Defensible Space: Insurance Won’t Deny You for Lack of It, but It Helps

Some homeowners fear their claim will be denied if they didn’t trim vegetation or create defensible space. In reality, insurers rarely deny fire claims for this alone. But:

• It can affect your ability to get future coverage
• It can influence premium increases
• It can decide whether your insurer renews your policy

Defensible space doesn’t change your current claim—it changes your future insurability.

7. When to Reevaluate Your Wildfire Risk

• After nearby wildfire events
• After insurance renewal notices or premium spikes
• After changes in vegetation or drought conditions
• Anytime you upgrade your home’s exterior materials

Risk changes fast with drought and regional development. Keep your policy aligned so you aren’t caught exposed when the next fire season hits.