House with wildfire in background

The California “River Fire” of Salinas, in Monterey County, was ignited by dry lightning on August 16, 2020, fills the sky with dark smoke and flames as it burns close to a houses on its first day. Image: Shutterstock.

Once upon a time, states like Oklahoma, Florida, and Texas claimed the top spots in the high-risk extreme weather club. But in the last decade, California has been edging quickly up the list with a string of devastating wildfires. The figures are staggering. More than 9,000 wildfires consumed almost 5 million acres of California land in 2020 alone.1

California homeowners have borne the brunt of that destruction, losing homes, neighborhoods, land, and even their home insurance policies in extremely high-risk areas.

The good news is that the California Insurance Commissioner has already stepped in. Most recently, in early 2022, California’s Safer from Wildfires framework will require home insurance providers to factor in fire safety measures when calculating premiums for households and businesses.2 That should bring those spiking insurance rates down a bit.

And, just for the record, the average home insurance premium in California ($1,177) is still pretty low compared to tornado-prone areas of Oklahoma ($2,000).3

However, this doesn’t mean that getting coverage for your wildfire-prone California home will be a piece of cake or that it’s going to be cheap. To make your search for quality home insurance in California easier, we’ve prepared this wildfire home insurance guide for you. It will show you:

  • What the wildfire situation in California looks like
  • What home insurance covers in wildfire-prone areas of California
  • How to get insurance in parts of California at risk for wildfires
  • How to fireproof your home (because every citizen can make a contribution in this fight)

Homeowner’s Tip Home insurance providers already figure “protective devices” like burglar alarms, deadbolts, and smoke and CO detectors into our rates. Homes that have them pay lower insurance premiums. That’s the idea behind the fire safety measures initiative in California. When I put Lemonade’s home insurance to the test, for example, my bill was 14 percent less with protective devices credits.

The California Wildfire Situation

Sadly, humans start 85 percent of wildfires.4 Researchers at Colorado Boulder’s Earth Lab made this startling discovery after sifting through a decade’s (1992-2002) worth of statistics from the U.S. Forest Service.

The situation has obviously changed since 2002, especially in California. With summers getting hotter and drier, California has become a tinderbox. Sometimes all it takes is a stray lightning bolt to touch ground and you’ve got an inferno on your hands.

Case in point: 2020. This was the year that broke all previous records for heat and drought in California. Throw in 14,000 dry lightning strikes in three days and you can see where this story is going.

Too many fires chewing through too many homes is a natural recipe for higher home insurance rates, which is the situation many California homeowners face today. In some cases, insurers may even go beyond raising premiums and deductibles and limit payouts and coverage. Some may drop homeowners entirely, citing too much risk.

Bottom line? If you’re shopping for home insurance in California, you should take a good look at what’s actually in the policies you’re considering. This is because they won’t necessarily offer the same coverage as you’d get in, say, Michigan, a state with very few natural disasters. Here are the parts of your homeowners plan you should be keeping an eye on specifically.

Did You Know: Prison inmates make up 30 percent of California wildfire fighting crews. They get $1 to $2 per hour for their work on the front lines.5

Homeowners Coverage in Wildfire-Prone Areas of California

The core of your homeowners insurance policy is going to be the same no matter what company you choose: protection for your home, possessions, and, to an extent, your family. (Still learning the ropes of home insurance? Check out our complete homeowners insurance buyer’s guide for a full discussion of those basic features.)

That’s the gist anyway, but in states prone to natural disasters, insurance companies have been known to peel back those basic protections. Here’s what I mean.

Dwelling Coverage

Dwelling insurance covers your home and any structures built on your property, so choosing the right amount of dwelling coverage is incredibly important. Generally speaking, you need to cover yourself not for the value of your home, but for the amount it will cost to build it back in the event of a wildfire disaster.

Makes sense, right? Building costs and inflation tend to go up over time. (We’ve certainly seen a lot of both over the past two years!) If you don’t figure them into your coverage limit, you may be reaching into your own pocket when it comes time to rebuild.

For residents of California, the situation gets a little trickier. Insurers could decide to cap your dwelling coverage if your home is at high risk for fire damage. So keep your eyes open for lurking fine print.

FYI: California has wildfires and earthquakes. Florida has hurricanes and floods. In both cases, residents often see prohibitively high home insurance rates or outright denial of coverage. For your best home insurance options in the Sunshine State, have a gander at our top picks for homeowners coverage in Florida.

Personal Property Coverage

Personal property is all the stuff inside your house — clothes, computers and gadgets, and furniture. Naturally, you’d expect your home insurance policy to cover the possessions you care about. And it does. The problem is, there are two ways insurers approach reimbursing your for lost personal property.

They either figure depreciation into your payout (actual cash value) or they give you the full amount (replacement cost value). Some home insurance providers like State Farm include RCV coverage in their basic plans. Others charge a little more for it. And that’s just what you’d expect — except in California, you may only get the first option if you live in a wildfire-prone area.

Is an ACV payout the end of the world? Not necessarily. But it could end up hurting you. Here’s how.

Let’s say a kitchen fire destroyed your $50 Lorex smart camera (one of those “protective devices” I mentioned up top that could earn you a serious discount on your home insurance bill). With ACV coverage, your insurer would look up the price of your Lorex when you bought it and knock between 30-60 percent off for depreciation, leaving you with a considerably smaller payout. With RCV coverage, you’d get whatever a Lorex camera cost at the time you lost it, which is almost always a higher payout.

Homeowner’s Tip In the grand scheme of things, a security camera is small change. But when you multiply that percentage of depreciation across all your things — your $6,000 couch, say — you’ll definitely be rolling back your sleeves and reaching deep into your pockets to refurnish your home. So, again, keep an eye out for ACV/RCV when reading through your California homeowners policy. 

Replacement Cost Coverage

Replacement cost coverage is an option for your home, too, not just your things. The idea is the same. You pay a slightly higher rate per month for more assistance when you need it — typically a 20-50 percent boost over your basic dwelling coverage.

As we’ve seen time and time again when helping folks figure out home insurance coverage, you may very well need that boost just to cover inflation and rising building costs. If your policy doesn’t come with a replacement cost coverage option, as is sometimes the case with California homeowners at risk for wildfires, you should probably work out another solution with your insurance agent, or find another insurer.

Temporary Living Expenses

We never know when our homes may become uninhabitable. Safe to say, if you’re ever the victim of a catastrophic event like a wildfire, you won’t be moving back in for a while.

Temporary living expenses give you the money you need to get through this very destabilizing period at as close to your normal standard of living as possible. TLE are baked into every standard homeowners policy, so you aren’t at risk of losing them — even if you live in wildfire country. However, you may see special limits.

Did You Know: 71.8 million U.S. homes are at risk of wildfires today. About 4.2 million of those homes are at severe to extreme risk of fire damage. The total number of risk-prone homes could rise to 79.8 million by 2050.6

Insuring Your Home in California’s Wildfire Zones

California’s Department of Insurance is doing what it can to help the growing number of folks in the Golden State hoping to find a top home insurance plan with a reasonable monthly price tag. Not every case is a success story. If you find yourself squeezed out of the traditional homeowners market, however, you do have options.

FAIR (Fair Access to Insurance Requirements) Emergency Fire Insurance

You may have heard of FEMA flood insurance (which you can purchase through the National Flood Insurance Program). FEMA makes sure that anyone who needs it (or is required to have it) can get flood insurance. That’s what FAIR plans do for areas at risk for wildfires. How good are FAIR emergency fire insurance policies in California?

Well, if it’s any indication, the California Insurance Commissioner is currently locked in battle with the FAIR fire insurance pool (the consortium of companies that sell wildfire insurance to otherwise insurable California residents) to expand their wildfire insurance into whole insurance policies. (As it is now, you need to purchase a separate policy for fire insurance, which isn’t ideal.)

FAIR plans also tend to cost more and cover less. In fact, a number of those worst-case scenarios I laid out in the previous section apply here. So I’d say at present, a FAIR plan would be your last option.

FYI: Getting a FAIR emergency fire policy comes with at least one major obstacle: to qualify, three traditional home insurers need to refuse you first.

Surplus Lines Insurance

Surplus lines insurers take risks traditional insurers don’t — like insuring Californians who live in areas that have already been ravaged by wildfires. As you can imagine, they don’t do this from an overdeveloped empathy gene. They do it because there’s money in it. Like with FAIR plans, scooping up a surplus lines policy means higher rates and deductibles.

Also, be aware that the main difference between a traditional insurer and a surplus lines insurer is that the names you know (Nationwide, Progressive, State Farm, etc.) all contribute to a state guaranty fund. If your insurer goes bankrupt, your insurance payout will come from this fund. With surplus lines insurers, you have no such guarantee.

Paying More With a Traditional Insurer

Between paying more for less (FAIR), exposing yourself to bankruptcy (surplus lines insurance), and getting complete insurance at a higher-than-average rate (traditional insurance), the safest choice may be the third, provided you can get it. If it’s any consolation, as I mentioned up top, California home insurance is still comfortably below the national average. At least for the moment.

That said, no one wants to pay more for a situation totally beyond their control. And no one should. So let’s keep our fingers crossed that California’s Insurance Commissioner will get his way and more equitable home insurance plans will be on the horizon for California residents in wildfire zones.

Homeowner’s Tip Some insurers are stepping up to the plate for California residents. For example, Nationwide has partnered with Wildfire Defense Systems (WDS) to offer Californians special monitoring, education, and mitigation services. Curious? Here’s the full story on Nationwide home insurance costs and coverage.

Preventing Wildfires in California

I mentioned that wildfires are beyond our control. They are. But that doesn’t mean California residents can’t take sensible measures to mitigate the damage they cause. Soon they may even have an economic incentive.

If the California Insurance Commissioner has his way, in the next few years Californians in wildfire zones may start seeing returns on their fireproofing efforts in the form of lower insurance premiums. But you don’t have to wait until the law goes through. Here’s how you can get started today.

Fireproof and Maintain Your Roof

The quality and material of your roof can slow down a fire. Asphalt, metal, slate, and tile are all good. Wood should ideally go. (If you do have a wood roof, and absolutely refuse to part with it, at least coat it with flame-retardant varnish.)

While you’re up there on the roof, be on the lookout for broken shingles. Embers can slip through those cracks and into your home. If you practice good roof hygiene, you’re also warding off future roof damage that your insurance plan might not cover.

Clear Your Gutters

Clean gutters do double duty. They minimize the likelihood of water damage you might not be insured for. (For a full breakdown of what’s covered and what’s not, check out our homeowners guide to water damage coverage.) And they eliminate a tasty snack for a berserking fire. So pull out dead leaves, branches, and debris regularly during wildfire season (roughly late spring to early fall). If you do, you’ll make it harder for a fire to gain a foothold on your house.

Upgrade to Fire-Resistant Windows

If you’ve ever experienced the magic of double or triple pane windows, you’d know they really do keep the ambient temperature in and the noise out. Well, that tempered glass also holds up a lot better to the extreme heat of a wildfire, especially if you’re currently sporting plastic skylights.

Triple pane glass is expensive, yes, but you may be eligible for a government rebate through the California Insurance Commissioner’s new “home hardening” incentive or for some financial aid via the California Weatherization Assistance Program.7

Clear Your Property

Anything sitting on your property when a wildfire strikes is flame fuel. Chopped wood, gas tanks, leaf piles … your half-built shed. Certain kinds of trees, like pines, are also highly flammable because of the oils they secrete in their needles. Needless to say, a carpet of combustible oil sitting around your yard is bad news. So clear those needles away.

And if you’ve got a garden, don’t let it go to seed. Dry, dying plants, when they come into contact with a raging fire, will burst into unexpected life. A moist, well-nourished garden, on the other hand, is a tougher opponent.

Did You Know: Depending on where you live in California, rebates for fire-resistant windows may be as high as $2 per square foot, as long as your windows are ENERGY STAR certified.

Final Thoughts

California residents in wildfire-prone areas face serious challenges that aren’t always fair. But California’s Insurance Commissioner hasn’t turned a deaf ear. Discounts for fire prevention measures and single-plan insurance options with built-in wildfire coverage should be on the way.

In the meantime, now is the time to start fireproofing your home. (In certain parts of California, you’ll find government rebates to help you along.) At the same time, if you haven’t taken a look at your homeowners policy in a while, it’s time to dust it off. Pay very special attention to dwelling and personal property coverage. (You’ll want replacement cost coverage in both cases).

If you believe your coverage isn’t fully protecting your home, it might be time to reconsider your premium, or to explore other options, like California’s FAIR emergency fire insurance.

Whatever you do, it’s better to be prepared for the worst-case scenario than let it catch you off-guard. Because, judging by the science on the street, California isn’t going to be getting any cooler or wetter any time soon.

FYI: According to the California Insurance Commissioner, over a third of insurance companies in the states had discontinued residential fire policies by 2019.8

FAQs

Does my California home insurance policy cover damage from wildfires?

Yes, it should. But the number of California homes that pose serious wildfire risks is growing and your insurer could refuse you coverage in the future.

What are the top insurance companies for California’s wildfire-prone areas?

Lemonade doesn’t cover the whole country, but it does cover California. Our Lemonade homeowners coverage guide will give you a nice taste of what their plans have to offer California residents. Another good option is Nationwide, which offers special wildfire services for residents of California. For more on Nationwide’s protections, read my hands-on Nationwide home insurance review.

Does condo insurance cover wildfires?

Yes, your condo insurance should cover wildfires. For maximum coverage, you’ll want an “all-in” policy. Otherwise, the interior of your condo might not be covered.

Are California’s FAIR emergency fire insurance plans cheap?

California’s FAIR fire insurance may be more expensive than a traditional plan and it likely won’t offer comprehensive coverage.

Can I get a government rebate for installing fireproof windows in California?

Yes, you can, but only in certain areas and at certain times.

What if my insurer refuses to renew my California homeowner’s policy?

Find out why. If you believe you’ve been denied insurance unfairly, you should contact the California Insurance Commissioner. In the meantime, start looking for another insurer.