Will Homeowners Insurance Cover Wildfire Smoke Damage?

Though we're only halfway through the year, the U.S. has already experienced 21,305 wildfires that have burned nearly 645,000 acres. These fires can be devastating to natural environments, but they can be even more problematic when they move into populated areas. Wildfires can destroy entire towns, and even homes that avoid the flames often wind up dealing with costly smoke damage.

This leaves many homeowners wondering if they're adequately protected against wildfire smoke damage. Here's what you need to know.

It depends on where you live

There's no such thing as a wildfire insurance policy. A typical homeowners insurance policy, known as an HO-3 policy, provides coverage against a variety of natural disasters, including wildfires. This includes damage from the flames itself as well as smoke damage.

But as wildfires have become more prevalent and more costly, some insurers are taking steps to protect their financial solvency and their bottom lines. State Farm recently decided that it would no longer sell new homeowners insurance policies in California due to the high risk of wildfires there. And other insurers are also wary of selling policies in areas where there's an increased risk of wildfire claims.

Each company handles this in their own way. Some may require homeowners to pay a separate and higher deductible when filing a wildfire claim than they would for other types of homeowners insurance claims. Others may sell homeowners insurance policies with exclusions for wildfire damage. Or they may refuse to sell policies in that area altogether, like State Farm.

What homeowners can do

It's important for homeowners in wildfire-prone areas to understand what their policies do and do not cover so they aren't caught off guard when they need to file a claim. Homeowners can learn about what type of wildfire coverage they have and what kind of deductible they'll pay by reviewing their policy terms or reaching out to their home insurance provider for additional information.

It's also a good idea to conduct an annual review of policy limits. Building costs are higher now than they've been in the past. What may have been an adequate amount of coverage when the homeowner purchased the policy may no longer be enough to pay for a full rebuild should this be necessary. An insurance agent or a local builder in the area can help homeowners estimate how much coverage they need in order to be fully protected.

Shopping around is key to scoring great rates on homeowners insurance at any time, but this is especially true for those who live in areas at high risk of wildfires. All insurance companies evaluate risk a little differently, and some may take the threat of fire more seriously than others and charge more accordingly. The only way to know which offers the best rate is to get quotes from several companies and compare them.

Most people should be able to find some sort of wildfire coverage with traditional insurers, but there are areas where no insurance company will take on the risk. In this case, homeowners may have to turn to their state's Fair Access to Insurance Requirements (FAIR) plan.

This is a special homeowners insurance policy that provides basic fire coverage in areas traditional insurers won't work in. These policies are often more expensive than a typical homeowners insurance policy, though, so they should be a measure of last resort.

Take these steps to keep your home safe

Homeowners should also do what they can to reduce the risk of wildfire and smoke damage to their home so they can hopefully avoid filing claims. Some important steps to take include:

• Establishing at least 30 feet of defensible space around the home: Keep the grass and landscaping trimmed and remove as much combustible material from the area as possible.
• Install wire mesh screens over attic vents: This can reduce the risk that wind-blown embers find their way inside the home.
• Keep the roof and gutters clean: Debris here could catch fire if embers land upon it.
• Consider fire-resistant building materials: Homeowners who are building or remodeling should look into fire-resistant siding and roofing materials to help reduce the risk of severe wildfire damage.

Some insurance companies even offer discounts to homeowners who take crucial wildfire mitigation steps.

While we can hope that we see fewer wildfires in the future, for now they remain a pretty common -- and costly -- occurrence. So it's important for homeowners to take all possible steps to ensure they're fully protected. Even if a town hasn't been hit by a wildfire before, that doesn't mean it'll never happen. It's best to take the steps above now rather than waiting until a wildfire is on the way.