Experts say that large portions of the Southwest, Midwest, and Western United States are all experiencing severe drought conditions.
That means the risk of wildfire is increasing for many people.
Verisk Analytics, a company specializing in insurance risk evaluation through data analysis, has determined that over 4.5 million homes in the United States are considered to be at high or extremely high risk for wildfires.
The National Interagency Fire Centers’ last year report states that 3,577 homes were destroyed by wildfires but there are more dangers besides only droughts and extreme heat. People are the main cause of wildfires, according to statistics from the Wildland Fire Management Information and U.S. Forest Service Research Data Archives, so you should also be concerned about them.
Common causes of wildfires include discarded cigarettes, unmonitored campfires, the burning of waste, faulty or negligent equipment usage, and arson.
Having the knowledge that typical fire damage is usually included in homeowners, condo, or renters insurance policies may bring you some peace of mind. Down below we will provide you with the information on what you should know about homeowners insurance and wildfires.
Wildfire Risk Statistics
States that have a high proportion of at-risk properties for wildfire destruction may experience slower recovery timeframes and more home displacements.
Currently, about 72 million properties are susceptible to wildfire devastation, experts say. They add that there is a serious or extreme risk for more than 4 million residents.
The states with the highest proportion of homes with at least 0.03% risk are:
- 4.65 million houses are at risk in California.
- 4.56 million houses in Texas are at risk.
- 3.93 million properties in Florida are at risk.
- 1.89 million houses in Arizona are at risk.
- 1.14 million at-risk properties in Oklahoma
The properties with the greatest percentages of at least 0.03% danger are:
- 68.6% in New Mexico
- 66.8% for Wyoming
- Nevada: 58.7%
- Utah: 57.7%
- Kansas: 51.4%
Does homeowners insurance cover wildfire damage?
Yes, the homeowner’s insurance policy covers the damage from fire, including damage caused by a natural occurrence such as a wildfire.
That means if a fire damages your home, the insurance offers a variety of coverage options to assist with home repairs or rebuilding, replacing personal property, and, if necessary, paying for temporary accommodations if you can’t live in the home.
More you need to know about homeowners insurance coverage
A home’s physical structure and any adjacent buildings, such as a deck or garage, are covered by the homeowner’s policies. You will be covered up to the policy limitations, which are normally calculated based on how much it would cost to completely rebuild the house using local labor and material prices.
One thing to keep in mind: you may want to check your coverage amount.
A shortage of building supplies, especially lumber, across the country as well as labor shortages have caused prices to increase.
That means if your home is damaged by a wildfire you could be forced to foot the bill for the excess if the cost to reconstruct your home exceeds the limits of your dwelling insurance.
It may be wise to think about incorporating extended or guaranteed cost coverage into your policy if offered by your insurance provider. Extended replacement cost insurance provides a specific percentage, over and above your dwelling coverage amount.
This provides you with some buffer in the event that prices in your area increase. For even more comprehensive protection, consider guaranteed replacement cost, which pays to rebuild your home no matter the cost, if that is what you desire.
Are other structures on my property also covered?
Structures that are separate from your home, such as detached garages, sheds, or fences, are also included in the category of other structures. This form of coverage frequently depends on the amount of your housing coverage.
Your coverage for other structures, such as outbuildings, might be set at 10% of your coverage for your main residence. You would have a $25,000 cap on other structures if your dwelling coverage was for $250,000.
It would be advisable to review your policy if you have recently added any structures, such as an in-ground swimming pool or a gazebo, to your property. If you need to purchase more coverage, talk with your insurance agent.
Coverage for personal property
This coverage applies to all of your personal property, including furniture, kitchenware, gadgets, and clothing. Typically, policy limits range from 50% to 70% of your home coverage. Let’s say your personal property coverage is established at 50% and your dwelling coverage is $250,000. This would mean you would be eligible for $125,000 in coverage for your personal possessions.
Making a home inventory is a fantastic approach to finding out if your personal stuff is adequately covered. Essentially, create an inventory of all your possessions and then calculate the cost of replacing them in the event of a fire that destroys your home. If your current insurance coverage limitations are insufficient, you might want to get more personal property coverage.
Insurance for higher living costs
“Loss of use” is a term that refers to additional living expenses coverage. Loss of use provides coverage for expenses such as hotel stays, meals, pet boarding, and laundry services if you are unable to reside in your home as a result of damage caused by a wildfire.
Even if your home is not directly impacted by the fire, you can still make a claim under this insurance if the authorities order an evacuation of your neighborhood.
A percentage of your home coverage is usually the standard for additional living expenses coverage. Imagine that your additional living expenses coverage is set at 25% of your dwelling coverage and your dwelling coverage amount is $250,000. You could potentially receive up to $62,500 for loss of use. If you’d like, you can raise this cap as well.
Tree, shrub, plant, and lawn insurance
A portion of your dwelling coverage may be allocated toward covering trees, shrubs, plants, and lawns on your property.
For example, if you have a dwelling coverage amount of $250,000 and your policy provides coverage for trees, shrubs, plants, and lawns up to 20%, you would have a maximum coverage of $50,000 to replace these items.
However, pay great attention to the special limits in your policy. For instance, the maximum amount that your home insurance policy will pay for any tree, shrub, or plant is $1,500. You will be responsible for making up any difference in cost if you need to replace pricey landscaping.
Own a house damaged by fire?
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