Getting home insurance in a high-risk location is hard. Many people ask if they can still get homeowners insurance if they live in an area that’s highly prone to brush fire. But YES, you can still find one. Typically, standard homeowners insurance covers your property from fire damages like wildfires. However, due to nonstop and record-breaking brush fire incidents in recent years, getting an insurer becomes a struggle.
Nowadays, if you happen to live in high-risk areas, getting standard insurance for your house that covers brush fire can be very hard. Yes, you can have insurance for your house, but you need to add an extra policy to have protection against wildfires if you want to make sure that you will be fully covered.
Also, nonrenewals and cancellations have become a normal thing now since the events of wildfires become too frequent. One of the hard parts is, mortgage companies require homes to be insured. That being said, cancellations of home insurance can not only put you in total stress but also your financing at risk. After losing your insurance, looking for another one can be twice as hard.
What causes brush fires?
Natural triggers can cause wildfires or brush fires such as lightning, and climate change. However, 85% of fires are a cause of human negligence. Undisciplined people who left lit cigarettes, campfire, sparks from equipment, hot rifle-bullet fragments, and arson. And due to these reasons, cases of brush fires are continuously rising. Although many people have the impression that California is the only state with the highest risk, what happened in the past years tells us otherwise. Other states like Colorado, Oregon, Arizona, Idaho, Montana, and Nevada are just a few states on the list of having brush fires.
- Homeowners insurance typically covers fire damage
- Some States offer Fair Access to Insurance Requirements Plan or FAIR to eligible homeowners who cannot find home insurance.
- Some insurers no longer offer homeowners insurance in high-fire risk areas and deny renewal of the contract.
- If you want extra coverage on your policy, you can add an endorsement or Guaranteed Replacement Cost
States that have a high rate of wildfire incidents
The heat of California can be the number one reason why it is always on the first spot. But that doesn’t mean that other states are safer from the fire. Here are the top 3 states of most brush fire cases in the year 2020.
As of December 2020, there have been a total of 9,279 fire incidents in California. These incidents burnt 4,197,628 acres of land. Destroyed 10,488 structures and 31 casualties. This is the highest rate of wildfire damages that happened in just one year.
The three largest fires in the history of Colorado were recorded last 2020 where over 700,000 acres were burned.
- Cameron peak fire – It all started at Arapaho and Roosevelt National Forests in August. It became the state’s largest wildfire in history after burning over 208,913 acres after it was finally contained in December.
- East Troublesome Fire – This is the second-largest fire in the history of Colorado. From Oct 21 to 22, the blaze moved as much as 6,000 acres per hour that burned 193,812 acres all in all. There are 350-400 families who lost their homes because of this.
- Pine Gulch Fire – This is the former largest fire in the history of Colorado before the first two happened. The Pine Gulf fire started on July 31 and just stopped on September 24. The brush fire burned almost 140,000 acres in total.
Approximately 1 million acres of land was burned in Oregon last 2020. This almost doubled the 10-year average of 557,000 acres on the historical record. There were thousands of structures destroyed, and over 2,200 there were homes.
Types of Insurance Coverage
Looking at the destruction wildfire brought to the lives of many gave you an idea of what to be prepared for. We can never know when accidents like this can happen. And the only way for us to be prepared is to make sure our lives and property are covered no matter what. Now let’s take a look at what standard home insurance can cover in case of wildfire damage.
Standard Homeowners Insurance
Now, let’s say, you were able to get a homeowners insurance policy even if you live in a wildfire-prone area. If this happens, your house and your personal belongings are now both covered from fire damage. Also, your insurer may cover additional living expenses if you need to evacuate your home and live temporarily in a new place while your house is being built. Here are what’s covered in standard homeowners insurance:
This will cover the cost of construction and repairs of your home after being damaged by a brush fire. However, you need to remember that dwelling coverage will just cover its maximum limit. Meaning, if the total amount of rebuilding your home is less than the maximum limit, then you will be underinsured. Any amount more than that should be out of your pocket. Hence, in insuring your home, don’t think about how much you just want to pay. Instead, think carefully about how much you must pay to fully insure your home. Remember that your insurance must be enough to rebuild your house the same as before.
Moreover, you should always keep in mind that due to the demand, the number of materials needed to build a home will surely go up. That is why making sure that your coverage is enough is a must to avoid having problems in the future.
In case you think you need to add more coverage, you can always ask about adding an endorsement. Policy add-ons to extend replacement cost can add another 20% – 50% of your dwelling coverage limit. If this is still not enough, there is another option. You can also add
Guaranteed Replacement Cost. It is another type of dwelling coverage enhancement that can cover the reconstruction cost no matter how much the price is. For detailed information about these endorsements, it is best to talk to your trusted insurance agents.
Personal Property Coverage
This policy covers your personal belongings like your furniture, clothes, appliances, and jewelry. However, the limit is normally just 50% of your dwelling coverage limit. Although some insurers can allow you to increase your limit up to 75% if you wish. If you have expensive possessions like sets of jewelry, antiques, furs, paintings, and a collection of guns, let your insurance agent know so they can give options on how to properly insure these items.
In a nutshell, your home insurance can cover only up to the maximum limit of your policy. Anything more than that, you can just add an endorsement to make sure that you will not be underinsured in case of unexpected calamities.
In case of a total loss, you need to move temporarily to a new place. If the house become inhabitable, your policy’s loss of use coverage may reimburse you. This covers your expenses like food, transport, and house rent. Just make sure to keep all receipts. These are needed when you file your claim. It will not only serve as evidence but also can make the process of your claim faster.
What is Fair Access to Insurance Requirements Plan or FAIR?
FAIR is a state-mandated program that gives access to insurance for homeowners having trouble insuring their houses because they live in a high-risk area. FAIR plan can cover high-risk properties when standard home insurance can’t. It is partially subsidized by private insurers and taxpayers. So that instead of just one company carrying the risk of your house, multiple insurers are combined to cover the risk. For example, a large brush fire damages your home from the ground and needs to be rebuilt. The cost of the claim will be shared by all participating companies instead of just one.
How to know if you are eligible to apply for FAIR Plan?
Although this plan is your best option if you are having trouble finding an insurer or just worried you can’t have one. Still, you should be eligible first before you can apply. You should exhaust all the options before you try FAIR. One must be denied by several private homeowners insurance companies before you can be considered. Also, you need to make sure that the reason why you are denied is because of matters that are beyond your control, and not because of the poor maintenance of your home. Because if that happens, even the FAIR Plan has the option to refuse coverage. Although not all states offer this, most high-peril states do.
Overall, whether you are in a high-risk area or not, the bottom line is you need your insurance always! That is why checking for the best policy term that suits your needs is a must