Wildfires Making Insurance Coverage Hard to Get – California Expands State Coverage Fund

California recently announced new wildfire insurance rules that might be a glimpse into the future for Washington State homeowners having trouble getting insurance coverage in wildfire-prone parts of Washington. California’s new rules help people who can no longer get homeowner’s insurance coverage due to increased wildfire risk. The new rules expand a California state-run program acting as the insurer of last resort for homeowners living in areas at high risk of wildfires.

Like Washington and Oregon, California has seen significant damage from large wildfires in recent years. This has caused many insurance companies to cancel homeowner’s insurance policies for homes in high-risk areas. Even where coverage remains available, premiums have increased significantly. Many California homeowners have complained about being abruptly dropped by their homeowner’s carriers, or facing exorbitant price increases. In 2017 and 2018, California wildfires caused over 124,000 claims and about $26 billion in losses. Like other mass-disaster claims, wildfire insurance claims are often difficult due to the scope of the losses and the size of the claims.

California’s Fair Access to Insurance Requirements (FAIR) plan collects contributions from California insurance companies to support a fire loss coverage fund. Starting in April, FAIR will cover up to $3 million in damages, and will eventually be expanded to cover other non-fire liabilities, such as water damage or personal liability, typically covered by traditional homeowners insurance. The goal is that homeowners covered by FAIR should have adequate coverage without having to buy additional insurance.

The move was, predictably, applauded by consumer advocates but criticized by the insurance industry, which said the changes could hurt consumer choice.

Insurance Tips for Wildfire Season

Washington is predicted to have a particularly severe wildfire season in 2019. Wildfires are increasing as development pushes further into wilderness areas and wildfire risk pushes into parts of Washington previously assumed to be too wet to be at risk.

Here are some tips to make sure your insurance coverage is ready for wildfire season:

  • Read your policy and confirm it covers wildfire damage.  Most homeowner’s insurance policies traditionally covered fire damage.  But some policies exclude wildfire or disaster related losses.  
  • Confirm your coverage limits are sufficient.  If you bought your home many years ago, rising property values and construction costs may render your existing coverage inadequate.
  • Make sure your policy covers your entire loss in the event of a wildfire.  For instance, confirm your policy will pay your living expenses in the event you need to relocate while your home is rebuilt (known as “Additional Living Expense” coverage).
  • Make an inventory of important and valuable contents to make sure the insurer covers the cost to replace these items in the event they are lost in a wildfire.


Finally, be ready to go to bat and make sure you get the coverage you are paying for.    .  After a big disaster like a wildfire, there are so many claims insurers can’t investigate them all properly, so they just stop trying.  Disaster-related insurance claims are notorious for shoddy investigating, unresponsive staff, and overworked, poorly-trained adjusters pressured to cut corners to close out claims fast.

How Do I Make An Insurance Claim After Wildfires, Floods, Hurricanes or Other Natural Disasters?

Disasters have been in the news a lot in the last 12 months, between west coast wildfires, Texas floods and Florida hurricanes.  Disasters raise a number of insurance issues for policyholders, especially when they’re busy digging out of the wreck already.  Disasters also strain overworked insurance company personnel, who might make hasty guesses about your loss that wind up being inaccurate. Here are some steps you might consider taking if that happens (after making sure everyone is safe of course):

  • Promptly Notify Your Insurer – Your first step if you think you might have a claim is to tell your insurer. Delayed claim notice is a basis to deny an otherwise valid claim.  It’s also wise to make sure the insurer has your updated contact information.
  • Read Your Policy – Your insurance policy is an important starting point. It spells out your rights and the company’s obligations.  It contains important time limits and similar rules you need to follow in order to make a valid insurance claim.  It also specifies your coverage in detail; don’t assume the overworked adjuster processing thousands of similar claims will identify all coverage that might benefit you. It may require you consult with the company before undertaking any repairs, or have similar rules you need to follow.
  • Protect Yourself From Further Loss – Protecting yourself and your property from further damage is common sense. It’s also explicitly required by many insurance policies.  If you sustain further loss because you failed to take reasonable preventative measures, your insurer may have a valid basis to refuse to cover the additional loss you could have avoided.  But keep in mind that your policy may provide that non-emergency repairs require you to consult with the company before undertaking the work.
  • Make a Paper Trail – Take notes when you speak to the adjuster or contractors, and save your receipts for all disaster-related expenses such as repairs or hotel bills. Make sure you get important statements from the insurer, like requests for information or coverage statements, in writing. Keep an inventory detailing the full scope of the loss.
  • Get Repair Quotes – Get an estimate from the contractor or another appropriate person of the cost to repair the damage. This will give you a reasonable basis to double-check your insurer’s estimate.
  • Be Present During the Inspection – Your adjuster will likely inspect your property to ascertain the scope of the damage. It’s often wise to attend the inspection in person.  That way, you can point out the full extent of the damage and make sure the adjuster doesn’t miss anything.
Light snow in the Olympics.