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Wildfires & Insurance: What Homeowners and Businesses Need to Know

Writer's picture: Anthony DiBuonoAnthony DiBuono

Wildfires & Insurance: What Homeowners and Businesses Need to Know

Wildfires have become an increasing concern across the United States, leaving behind billions in damages, displacing families, and impacting businesses in affected areas. From the West Coast’s devastating fire seasons to unexpected blazes in other regions, property owners nationwide are reevaluating their insurance coverage to ensure they’re adequately protected.

Wildfire on a mountain

Will Wildfires in One State Affect Insurance Rates Nationwide?

While large-scale natural disasters can impact the insurance industry as a whole, most home and business insurance policies are assessed at the state level. Insurers operate through subsidiaries that evaluate risk independently in each state, meaning a wildfire in California, for example, won’t directly cause home or business insurance rates to rise in Texas, New York, or other states. However, ongoing wildfire risks have contributed to shifts in underwriting strategies, stricter policy requirements, and rising premiums in high-risk areas.


Home Insurance: What’s Covered in a Fire?

Homeowners insurance typically includes protection against fire damage, but the level of coverage can vary based on policy terms and state regulations. Standard policies generally include:

  • Dwelling Coverage – Pays to repair or rebuild your home after a fire.

  • Personal Property Replacement – Covers belongings such as furniture, electronics, and clothing.

  • Debris Removal – Helps cover the cost of clearing damaged property.

  • Additional Living Expenses – Provides temporary housing, food, and other essential costs if you’re displaced.

  • Liability Protection – Covers legal expenses if a fire from your property causes damage to others.

  • Coverage for Detached Structures – Includes garages, fences, and sheds.


However, fires caused by negligence, lack of maintenance, or arson are generally not covered by standard homeowners policies. It’s important to review your policy to ensure you have the right level of protection, especially if you live in a wildfire-prone area.


Business Insurance: Fire Protection for Commercial Properties

Businesses also face significant risks when it comes to fire damage, making the right insurance coverage crucial. Standard business insurance policies may include:

  • Commercial Property Insurance – Covers buildings, equipment, and inventory lost in a fire.

  • Business Interruption Insurance – Helps cover lost income and operating expenses if a fire forces your business to close temporarily.

  • General Liability Insurance – Protects against lawsuits if your business is responsible for property damage due to fire.

  • Commercial Auto Insurance – Covers business vehicles damaged by fire.

Some policies also offer extended coverage for wildfire-prone areas, but these options may come at an additional cost or require specific risk mitigation measures, such as defensible space around a property.


Reviewing Your Coverage: Is Your Policy Enough?

Whether you own a home or a business, ensuring that your insurance policy provides adequate fire protection is essential. Given the increasing frequency and severity of wildfires, now is the time to review your policy, assess potential gaps, and make any necessary adjustments.


If you have questions about your coverage or need guidance on finding the right policy, our team is here to help. Contact us today to explore your options and secure the protection you need.

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