Insurance

Understanding Fire Insurance in California:
Preparing for Wildfire Risk

Wildfire seasons in California have grown longer, more intense, and more unpredictable. As the risk increases, so does the importance — and the complexity — of securing fire insurance.

For homeowners, fire insurance is not only essential for financial protection but often a requirement from mortgage lenders. Yet in recent years, many Californians have faced rising premiums, dropped coverage, and fewer options. Understanding your fire insurance options and taking steps to mitigate risk can help protect your home and finances.

What is Fire Insurance?

In California, fire insurance typically comes as part of a homeowners insurance policy, covering damages caused by fire, smoke, and sometimes water used to extinguish flames. It may help pay for:

  • Repair or replacement of the structure

  • Personal property lost to fire

  • Temporary housing if your home becomes uninhabitable

  • Liability for fire-related incidents
    (in some policies)

However, in wildfire-prone areas, many insurers have either increased rates or stopped offering standard homeowners insurance entirely.

What’s Changing in California?

Over the past several years, major insurance carriers have pulled out of high-risk areas or limited their offerings due to the rising cost of wildfire claims. As a result, many homeowners are:

  • Dropped by their insurer at renewal time

  • Facing steep premium increases

  • Needing to turn to the California FAIR Plan, a last-resort policy for high-risk properties

The California Department of Insurance is working on reforms, but for now, securing adequate coverage often requires persistence and understanding your options.

Insurance Options in High-Risk Areas

  • 1. Traditional Homeowners Insurance

    Still available in many areas but may include wildfire exclusions in high-risk zones.

  • 2. California FAIR Plan

    A state-mandated insurance pool offering basic fire coverage when standard insurers won't. It does not cover theft, liability, or water damage, so it’s often paired with a Difference in Conditions (DIC) policy for full protection.

  • 3. Surplus Line or Specialty Carriers

    Non-admitted insurers may offer coverage when others won’t, though they are not regulated by the state in the same way and can set their own rates.

How to Protect Your Insurability

To make your home more attractive to insurers and reduce your wildfire risk:

  • Harden your home with fire-resistant roofing, vents, and siding

  • Create and maintain defensible space around your property

  • Form a Firewise USA® community or become Wildfire Prepared Home™-certified

  • Keep documentation of mitigation efforts to share with your insurer

Some insurance companies may offer discounts for these efforts — or be more likely to renew your policy.

What You Can Do Now

  • Review Your Current Policy

    Understand what’s covered and what’s excluded.

  • Talk to Your Insurance Agent

    Ask about wildfire risk, replacement cost coverage, and potential gaps.

  • Shop Around

    Each insurer assesses risk differently. You may find better rates or coverage elsewhere.

  • Know Your Rights

    Visit the California Department of Insurance website for up-to-date consumer protections and guidance.

Preparing for the Future

In wildfire-prone California, having reliable fire insurance is essential to recovery and peace of mind. While the insurance landscape is shifting, homeowners who prepare — both physically and financially — stand the best chance of weathering the storm.

Stay informed, take action, and don’t wait until the smoke is in the air to find out if you’re covered.

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Fire Adapted Big Sur is a program of the Community Association of Big Sur