The Wildfire Insurance Limitations That Surprise Homeowners in High-Risk Areas

Wildfire insurance is more important than ever—but homeowners in high‑risk regions often discover too late that their coverage has major gaps. Rising deductibles, exclusions, and nonrenewals can leave families exposed when fires strike.

Quick Take

1. High wildfire deductibles

In high‑risk areas, insurers often apply separate wildfire deductibles—much higher than standard home insurance deductibles.

What this looks like

• Percentage‑based deductibles (2–10% of dwelling limit)
• Higher deductibles for homes near brush zones
• Deductibles that apply separately to structures and personal property

2. Nonrenewals in high‑risk zones

Insurers increasingly decline to renew policies in wildfire‑prone regions, forcing homeowners into expensive last‑resort plans.

Common triggers for nonrenewal

• Proximity to brush or forested areas
• Homes on steep slopes
• Limited fire‑department access
• High FireLine or wildfire‑risk scores

3. Exclusions for smoke, ash, and ember damage

Some policies limit coverage for smoke or ember intrusion—two of the most common wildfire‑related losses.

Examples of limited coverage

• Smoke damage capped at low limits
• Ember‑caused damage excluded unless fire enters the structure
• Cleaning and deodorization not fully covered

4. Strict home‑hardening requirements

To qualify for full wildfire coverage, insurers may require homeowners to complete specific mitigation steps.

Typical requirements

• Class A fire‑rated roof
• Cleared defensible space
• Ember‑resistant vents
• Noncombustible fencing near the home

5. Limited coverage for outbuildings and exterior structures

Detached garages, sheds, barns, and fences often have lower limits—or are excluded entirely.

Common issues

• Outbuildings capped at a small percentage of dwelling coverage
• Fences and gates excluded
• Detached structures requiring separate endorsements

6. Loss‑of‑use coverage that runs out quickly

Wildfires can displace families for months, but additional living expense (ALE) coverage may not last long enough.

Typical limitations

• Low ALE caps that don’t match real‑world rental costs
• Time limits (12–24 months)
• Reimbursement only—not upfront payments

7. No coverage for landscaping or land restoration

Wildfires often destroy trees, shrubs, and soil stability—but most policies offer little or no coverage for land restoration.

Examples

• Tree removal limits
• No coverage for erosion control
• Limited coverage for retaining walls

Quick comparison: Wildfire insurance limitations

FAQ: Wildfire insurance limitations

Does homeowners insurance cover wildfires?

Yes, but coverage varies widely in high‑risk areas and may include special deductibles or exclusions.

Why are insurers leaving wildfire‑prone regions?

Rising claim costs and increased wildfire frequency make some areas unprofitable for insurers.

Does wildfire insurance cover smoke damage?

Sometimes—but many policies limit or exclude smoke and ember‑related losses.

Can I improve my wildfire coverage?

Home‑hardening, defensible space, and mitigation steps may help qualify for better coverage.

Final thoughts

Wildfire insurance is essential in high‑risk regions—but it’s not comprehensive. High deductibles, exclusions, and nonrenewals leave many homeowners exposed. Understanding these limitations helps you evaluate your risk and discuss options with a qualified insurance professional.