​Do Wildfires Have You Worried About Your Insurance Coverage? Here’s What to Do 

The California wildfires have caused at least 24 deaths, billions of dollars in damage and destroyed up to 12,000 homes according to CNN. They also serve as a reminder to homeowners across the country that disasters can happen at any time, and it’s vital to have the right insurance coverage to pay for perils.That is, if you can secure coverage.The Senate Budget committee had a series of hearings throughout 2023 on how climate change impacts the insurance market. In their December 2024 staff report, they concluded, “Climate-related extreme weather events will become both more frequent and more violent, resulting in ever-scarcer insurance and ever-higher premiums.”Subscribe to Kiplinger’s Personal FinanceBe a smarter, better informed investor.
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Sign up for Kiplinger’s Free E-NewslettersProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.Profit and prosper with the best of expert advice – straight to your e-mail.Their studies also found that home insurance premiums rose 40% faster than inflation. That means being proactive in checking that your coverage is still comprehensive for your risk factors and reshopping home insurance before your policy renews are essential to keeping costs low. Consider this advice in assessing your coverage.How homeowners insurance covers fire damageIn many areas of the country, your homeowners insurance protects your home and its contents against perils like fire. In turn, if a wildfire occurs and damages your home, you could receive compensation for those losses under different coverages in your policies.Here’s a breakdown of what insurance covers:Dwelling coverage: Protects any damage incurred to your home and its attached structures, like a deck or garage.Personal property: Any property damaged from the fire such as clothing, electronics and furniture are usually covered. It’s ideal to take a video of your home at least once a year so you have an inventory of all items impacted.Additional living expenses: If your home becomes uninhabitable due to fire, your insurance policy could pay for you to rent another home while awaiting repairs completed. It can also cover hotel costs, extra gas expenses (if you commute further to work) and additional food costs.Since policies vary by state, reading your policy documents can help you note any exclusions that apply to your coverage. You can also contact your insurance carrier to ensure you have coverage for wildfires, floods or other climate-related events.However, if you live in an area prone to wildfires, finding coverage will be more difficult. The California Department of Insurance backs this up, reporting insurance carriers declined to renew up to 2.8 million policies between 2000 and 2022. For example, State Farm dropped 1,600 policies in the Palisades area back in July 2024, according to Euronews.How to get insurance in risk-prone areasIf you live in an area suscepti