How to Make Sure You’re Properly Insured Before the Next Wildfire
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Recent wildfires have reshaped California’s insurance landscape, and some Los Angeles homeowners are seeing their premiums skyrocket or are facing policy non-renewals.
Wildfire survivors have also gotten smaller insurance payouts than expected, and other Los Angeles County residents who were spared from the fires may not realize they’re underinsured.
But there are proactive steps you can take now to make sure you’re protected in the next blaze. Use this guide to learn how to prepare the proper documentation, choose the right amount of coverage, and know your rights.
Wildfire Insurance & Legal Resources
Think Your Homeowners Insurance Payout Is Too Low? Here’s How to Push Back
Dispute a low home insurance settlement and learn how to get help with your claim if you want to rebuild or relocate after wildfire damage. This guide explains steps to fight for a fair payout, starting with an independent estimate.
Review Your Policy
Standard homeowners’ policies usually cover wildfire damage, but in high-risk zones, coverage may be reduced, excluded, or even canceled.
“Your insurance company is not on your side or your good neighbor. They’re a for-profit business,” Amy Bach, Executive Director of United Policyholders, warned homeowners.
Review these key components of your policy:
- Dwelling coverage: Make sure your limits reflect current rebuild costs for your property, including any additions and renovations.
- Additional Living Expenses (ALE): Check for coverage that pays for temporary housing in case you’re evacuated.
- Extended replacement cost coverage: This provides 25% to 50% more than your dwelling limit if rebuilding costs exceed expectations.
- Code upgrade (ordinance or law) coverage: This coverage helps pay for required upgrades to meet current building codes during reconstruction.
- Exclusions: Some insurers may exclude wildfire losses in high-risk ZIP codes. Many insurers use CAL FIRE’s Fire Hazard Severity Zone map, along with other risk tools, to assess wildfire exposure.
If your insurer has dropped your policy or won’t renew, compare policies through a broker, shop regional carriers, or seek help through the FAIR Plan.
Explore Alternative Insurance Options
Many major insurers, including State Farm and Allstate, have limited or paused new policies in wildfire-prone regions, but you’re not out of options.
Alternatives include:
- California FAIR Plan: This state-mandated policy offers basic fire coverage but requires separate liability coverage from a second carrier.
- Excess & Surplus (E&S) Carriers: These insurers specialize in covering high-risk homes, often through brokers.
- Regional Carriers: Companies like Einhorn Insurance, Mercury, and California Mutual Insurance partner with A-rated providers that continue to write policies in fire zones.
Ask brokers about bundling options and ensure you’re comparing policies based on replacement cost coverage, not just price.
Know Your Rights
Wildfire survivors in California are protected by a growing set of regulations and state laws enforced by the California Department of Insurance.
- Non-renewal protections: After a declared disaster, insurers cannot cancel or refuse to renew homeowners’ policies for one year in affected ZIP codes.
- Market share expansion: New rules require insurers to increase their wildfire coverage statewide by 5% every two years until they reach at least 85% of their previous market share.
- Rate oversight: While insurers can now pass reinsurance costs to consumers, those increases are subject to state approval.
If you believe your insurer has acted unfairly, file an online complaint with the California Department of Insurance or call 1-800-927-4357.
“They owe to replace what you had with like kind and quality up to your policy limits,” Bach said. “Stick for stick, board for board, the exact same house that you had.”
Wildfire survivors are finding out they’re underinsured and their policy limit is too low. Use this guide to spot the insurance gap and get help to cover the cost to rebuild your home.
Lower Your Premiums
California law requires insurance companies to offer discounts to homeowners who make their homes more fire-resistant. These discounts can range from 5% to 20%, depending on the insurer and the upgrades you make.
- Installing a Class-A fire-rated roof
- Enclosing eaves and using ember- and fire-resistant vents
- Creating a 5-foot noncombustible zone around the home
- Clearing vegetation within 30 feet of the structure to create defensible space
- Removing combustible materials (like firewood or furniture) from under decks or near windows
- Discounts also apply if you rally your neighbors to create a Firewise USA or Fire Risk Reduction Community
Document Your Property Today
Don’t wait for disaster to strike. Take these documentation steps today so that the evidence can speed up your claim and reduce disputes over what was lost.
“The insurance company is not always going to take your word for things,” Bach said. Documentation can “make or break your case.”
Resources for Small Businesses & Workers
Business Interruption Insurance: What It Covers and What It Doesn’t After a Wildfire
Learn how business interruption insurance works, including what it covers, what it excludes, and how to file a claim after a wildfire.
- Request a certified copy of your policy from your insurer.
- Save emails and any correspondence with your agent. Always ask for a summary of phone calls or meetings so you have a record of any agreements, assurances and requests.
- Photograph and video your home, inside and out, while walking around and narrating.
- Save receipts and serial numbers for anything you’d want to claim
- Keep your records in the cloud or in a secure off-site location.
Review Your Policy Every Year
Annual check-ins with your insurance agent allow your coverage to keep pace with your home’s value and fire risk.
- Update your dwelling limit to reflect rising construction costs.
- Verify your policy uses replacement cost value (RCV) rather than actual cash value (ACV), which deducts for depreciation.
- Ask about inflation guard coverage, which adjusts limits annually to account for rising rebuild costs.
Bach also recommends checking your dwelling coverage with some simple math to be sure it’s realistic for California’s current costs.
“If you know how many square feet of living space is in your home, and you know what your current dwelling limit is on the house,” Bach explained, “you want to divide that dwelling limit by the amount of square footage and see how much money you would have available to you to pay a contractor.”
Bach said the amount can vary based on your home, but it should be somewhere between $300 and $400 a square foot at a minimum.
Local experts estimate that rebuilding costs after these recent wildfires can average up to $600 per square foot, factoring in tariffs, labor shortages and overall demand. Custom homes, hilly terrain or high-end, fire-resistant materials will also increase costs, pushing some estimates close to $1,000 per square foot.
If you’re not sure where to start, visit United Policyholders for more wildfire recovery and insurance resources. You can also try the insurance finder tool from the California Department of Insurance or read more insurance tips from CAL Fire.
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