Homeowners across the country are burdened by wildfires but this risk is greatest along the West Coast. Worry was once solely relegated to the late Summer and Autumn months of fire season each year. However, homes today are under near constant threat from wildfires in California, Oregon and Washington. Climate change, years-long droughts and dense human populations have extended fire risk long past the traditional fire season. Because risk is greater and damage is more significant year over year, many insurance companies have shied away from protecting policy holders. As we enter summer, homeowners across the West should check their policies for proper coverage. Follow below for more about wildfire insurance coverage in California and beyond.

California Struggles to Protect Homeowners from Dropped Policies in the Long Run

Those living in one of California’s many high fire risk regions are often fearful of losing their homes to an uncontrollable blaze. Countless California homeowners depend on coverage in their homeowners insurance plans to recover or rebuild their homes if the worst were to happen. Unfortunately, policy holders are not always protected from financial ruin -- even when large-scale natural disasters strike. With California’s fire season growing longer and more destructive each consecutive year, insurers have been wantonly dropping homeowners. In his October 2020 article “California insurers are dropping homeowners threatened by wildfires” for CBS News, Khristopher J. Brooks detailed shocking numbers. Brooks revealed that “there were 235,250 policies discontinued [in 2019], a 31% increase from 2018.”

California insurers refused to renew many policies in areas prone to wildfires because they viewed them as “too risky and would rather not cover homeowners” at all. Areas that experienced the largest numbers of dropped policies include “the Southern Sierra northeast of Bakersfield, Northern California and communities just north of Los Angeles.” Homeowners who have been able to hold onto their policies still struggle to protect their homes as rates continue to skyrocket. Brooks noted that in California, “insurers can raise rates anytime with state approval” as long as they do not exceed 7% in a single year. Sadly, year over year increases of 6.9% across the board “have translated to hundreds of extra dollars in premiums for many.”

Some High Risk Homeowners Are Protected Under 1 Year Mandatory Moratorium

Thankfully, the state government offered homeowners in California’s most fire-prone regions some relief late last year. Joseph Serna explains in his article “California bans insurers from dropping coverage for 2.1 million homes in fire-stricken areas” for The LA Times. Serna writes that “the state Department of Insurance has issued a one-year moratorium prohibiting insurers from canceling or not renewing about 2.1 million homeowners’ policies.” This measure is similar to one instituted in late 2019. For many California homeowners, however, this relief measure represents only a temporary fix. It “hits the pause button on insurance non-renewals” for a single year as regulators search for ways to better protect homeowners. 

Everything You Need to Know About Wildfire Insurance Coverage

In her article “What You Need to Know About Wildfires and Insurance Coverage” for The Balance, Mila Araujo writes that “a standard home insurance policy will cover fire damage” in most cases. However, “if you live in an area where you are at high risk for wildfires, you may need to buy additional coverage to protect you.” Typically, home insurance policies covering fire damage will include “damage to the building or main dwelling structure” and to “landscaping, pools and backyard items.” Most well-rounded policies will also cover living expenses during displacement, debris removal and replacement of personal property. Some policies include building-code upgrade coverage, but most require homeowners to add this on to their policies as an endorsement. Homeowners usually need an extra policy to protect vehicles from wildfire damage. 

Jason Metz explains in further detail what policies typically cover in his article “What To Know About Wildfire Insurance” for Forbes. Metz writes that dwelling coverage “pays to rebuild or replace the physical structure of the home and attached structures, like a deck or garage.” However, extant structures might not all be covered under your policy. As such, you might need to apply for additional “other structures” coverage for “a detached garage, shed or fence.” Jason Metz notes that other structures' coverage is usually based on a certain percentage of your home’s value and thus your dwelling coverage. Whenever you add new structures to your property, you should update your policy to protect all built elements.  Homeowners should keep in mind that “not all insurance companies will cover wildfire damage in high risk areas, so you may have to get a FAIR Plan policy.”

What is a FAIR Plan Policy?

In another article for The Balance, Mila Araujo and Thomas J Brock explain that FAIR plan policies are often the last resort for homeowners. They write that “the Fair Access to Insurance Requirements (FAIR) Plan is a state-mandated program that provides fair access to insurance for individuals who are having trouble insuring their property due to the fact that insurers consider them high risk.” In order to qualify for a FAIR Plan policy, homeowners may need to harden their homes against wildfire risk. 

This may include removing combustible materials, clearing vegetation and replacing faulty wiring. Though California’s FAIR Plan does help many homeowners secure coverage for their fire-prone homes, “even the FAIR Plan has the right to refuse coverage if you do not adhere to their recommendations.” Furthermore, FAIR Plan premiums might be higher than standard plans. As such, homeowners in high risk areas should try to limit their risk by making protective changes to their property before applying for a FAIR Plan. Hardening your home against wildfires could make you eligible for a standard protection plan. 

What to Check When Reviewing Your Policy

Fine Print Policy Changes

Writing for The LA Times, columnist David Lazarus notes in his article “How to deal with an insurer after your home is burned down” that homeowners should check their home insurance policies each year. According to Lazarus, insurers often slip in new policy before a homeowner renews his or her policy. Lazarus writes that certain “provisions often are inserted into policies during routine renewals.” For example, the insurer might change the date by which fire damage to a home must be reported. While each change must be disclosed by the insurer within the policy text, “many homeowners may not pay attention or may not read the fine print.” 

Appropriate Coverage

In addition to checking if your policy has changed, you should also check if your policy’s coverage amount has kept up with inflation. Lazarus writes that homeowners who have had the same homeowners insurance policy for decades might have had enough coverage in the early years. However, that amount might not be enough to cover damage or loss today. In his article for The LA Times, Lazarus recommends homeowners determine whether “the coverage you’ve purchased is sufficient to accommodate increases in material and labor costs.” According to Lazaurs, “experts say underinsurance is one of the most common issues as homeowners try to recover and rebuild after a huge fire.”

Maintenance Requirements

Some homeowners insurance policies include maintenance requirements intended to better protect the home from wildfire damage or loss. Whether maintenance requirements appear in your policy or not, homeowners should properly remove brush and debris during fire season. In some areas, homeowners are required by law to maintain their properties to prevent flames from spreading quickly to surrounding properties. For instance, in Los Angeles County, homeowners of property located in the “Very High Fire Hazard Severity Zone (VHFHSZ)” are required by law to “maintain their property in accordance with the Fire Code (L.A.M.C. 57.322).” 

According to the Los Angeles Fire Department’s “Brush Clearance Requirements” brief, homeowners in the Very High Fire Hazard Severity Zone must maintain “year-round compliance” within 200 feet of structures and 10 feet of fences or roadways. Compliance includes reducing grass and brush to a height of three inches, removing combustible debris from roof surfaces and  trimming low branches on trees “so no foliage is within six feet of the ground.” Read the entire brief for full compliance instructions. 

What to Do If You Were Dropped by Your Insurance

If their policy is dropped between November 2020 and November 2021, homeowners should review the order. Many of those living in “Butte, Fresno, Lake, Los Angeles, Madera, Mariposa, Mendocino, Napa, Nevada, Monterey, Plumas, San Bernardino, San Diego, San Mateo, Santa Clara, Santa Cruz, Siskiyou, Solano, Stanislaus, Yolo and Yuba” cannot legally be dropped from their policies. Homeowners whose policies are dropped in one of these mandatory coverage zones should file a Request for Assistance with the California Department of Insurance. All homeowners living in wildfire-prone regions should first ensure their policy was dropped because of fire risk and not for another reason. Review this list of “Zip Codes Covered by Mandatory One Year Moratorium on Non-Renewals” to see if your home is covered by the moratorium. 

How to Harden Your Home Against California’s Wildfires

Securing an affordable homeowners insurance policy with wildfire coverage could be made easier by hardening one’s home against fire damage. Both standard insurers and FAIR Plan insurers might offer better coverage at a lower premium if the home is well-protected. In their Life Kit broadcast “6 Ways To Get Ready For A Wildfire” for NPR, Stephanie O’Neill and Clare Schneider offer a few recommendations. O’Neill and Schneider note that homeowners can approach hardening in two ways: “pricey adjustments and small changes that can make a big difference.” Big changes include major renovations like replacing roofs, decks, fences and windows with fire-resistant versions. Experts suggest swapping out wood-shingled roofs and wooden decks with “tile or composite roof shingles...and eco-friendly composite decking.” 

Dual-paned windows will also “better protect your home.” Lower-cost home hardening solutions include “covering vent openings with small-gauge metal mesh.” This mesh protects embers from “starting a fire in your attic or under your house.” Homeowners should also keep their roofs and gutters “free of pine needles, leaves” and other combustible materials. If you have to evacuate but worry for the safety of your home, O’Neill and Schneider recommend leaving your porch light on for firefighters and taking any loose patio furniture indoors. Lightweight pillows, wicker chairs and other loose items could catch fire and fly towards the home. 

Working with Element on a Fire-Safe Home

As California’s premier design-build firm, Element Homes is highly familiar with fire safety requirements across the state. We are well-versed in California’s Fire Safety Laws, Rebuilding Requirements and Wildland Urban Interface (WUI) Codes and Standards. We have both designed new homes in fire-prone regions and helped rebuild lost homes for our clients. Having worked with many SoCal homeowners, our team understands the unique challenges posed by high fire risk areas. 

Element’s Amanda Leigh is especially well-educated and positioned to aid homeowners experiencing fire damage or loss. Over the last twelve years, Amanda has helped countless clients navigate the insurance industry, securing maximum payouts on their policies. At Element, we believe insurance companies should support homeowners -- not distract, avoid and refuse to cover their rebuilds. Throughout her career with Element, Amanda has been able to secure high payouts for her clients -- fighting any insurance company on their behalf wherever necessary.

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