In the last few years, more than 240,000 wildfires burned 27.5 million acres across the U.S., according to the National Interagency Fire Center.1 And since 1993, the number of houses burned in wildfires has doubled.

Climate change is increasing the frequency and magnitude of wildfires, causing significant challenges for homeowners insurance markets in fire-prone states. Many residents need help finding affordable coverage as insurers raise premiums or refuse to issue or renew policies.

Learn about the effects of living in a fire-prone region and how to find homeowners insurance in fire-prone areas.

How wildfire risks affect homeowners insurance

The higher the wildfire risk in an area, the more expensive insurance premiums tend to be. Insurance companies charge more to insure homes in fire-prone regions because the location increases the chance they’ll have to pay out claims for wildfire damage. Claims can be costly, as wildfires destroy about 11% of the homes in their path.

Since the 1990s, the number of homes in wildfire zones has doubled, putting more homes and people at risk. The increasing frequency and severity of wildfires have led some insurance companies to limit coverage, exclude wildfire damage altogether, or even refuse to write new policies in areas with a high risk of wildfire.

For example, State Farm, Allstate, The Hartford, and Farmers Insurance are limiting or no longer offering new policies for California residents. Meanwhile, 76% of insurance companies cut back their coverage in Colorado’s home insurance market in 2022.2

Cost of homeowners insurance in fire-prone areas

Insuring a home in western states prone to wildfires, like Arizona, California, Colorado, Oregon, and Texas, can be pricey. The average yearly cost for coverage varies quite a bit from one insurance company to another, and even from one neighborhood to the next.

Generally, you’ll pay anywhere from a few hundred bucks to well over $10,000 per year. Your ZIP code, the insurer you choose, your claims history, coverage choices, and the specific characteristics of your home are some things insurers typically consider to evaluate the risk that you’ll file a claim.

5 best home insurance companies for fire-prone areas

Comparison shopping can help you find the most affordable home insurance if you live in a fire-prone area. Insurify researched the best homeowners insurance companies for people living in areas with high wildfire risk.

Best in Arizona: Auto-Owners

Best in California: Encompass

Best in Colorado: Allstate

Best in Oregon: Farmers

Best in Texas: Mercury

How to get affordable home insurance in fire-prone areas

Living with the threat of natural disasters doesn’t mean you have to push your financial limits on homeowners insurance. Here are some tips to help you find affordable wildfire insurance:

• Reduce your fire risk. Simple steps like clearing brush and debris away from your home, installing smoke detectors, and using fire-resistant landscaping could lower your premiums.

• Take advantage of discounts. Many insurers offer discounts to help you save. Consider bundling home and car insurance, setting up automatic payments, and installing smart-home tech.

• Raise your deductible. If you’re willing to pay more out of pocket to file a claim, you could save on your monthly premiums.

• Consider a FAIR Plan. If you can’t find coverage from a standard insurer, your state’s Fair Access to Insurance Requirements (FAIR) Plan could be a good last resort. Keep in mind that FAIR Plan rates may be higher than those from standard insurers.

• Get quotes from more than one company. Take the time to check prices from a few different companies to see which offers the best rates and coverage for your needs.

What homeowners insurance covers in fire-prone areas

Most homeowners insurance policies in high-risk wildfire areas offer the same basic protection. This generally includes your house and personal property coverage if a wildfire damages your property. But there’s a catch: Some insurers limit new policies or flat-out refuse to cover wildfire damage in certain areas due to climate risk.

If your insurer won’t cover wildfire damage or increases your rates, one option to look into is your state’s FAIR plan. While FAIR plans can be a lifesaver, they’re not always the best value. You’ll typically pay higher premiums and have less protection than a standard homeowners insurance policy.2

Coverage limits and insurance policy terms also vary depending on where you live. For example, Colorado’s FAIR Plan maxes out at $750,000 in coverage, while a California homeowner can get up to $3 million.

What to do if your insurer drops your coverage

As wildfires become more frequent and severe, some insurance companies are abandoning high-risk areas. But an important distinction exists between an insurer canceling your policy and refusing to renew coverage.

Insurance companies can’t cancel a policy if it’s been more than 60 days since its issue date unless you don’t pay the premium, commit fraud, or lie on your application. In a non-renewal, the insurance company can decide not to renew coverage once your policy expires.

If your homeowners insurance company drops your coverage, take these steps:

• Address any concerns. Ask why the company canceled or refused to renew your policy and try to resolve any issues, like clearing brush around your home, to reduce fire risk.

• Talk to your insurance agent. It’s a good idea to discuss your options with your current insurance agent. They can help you find specialized coverage for homes in wildfire-prone areas.

• Explore your options. Start shopping for a new policy right away to avoid a lapse in coverage. Compare quotes from at least three companies to make sure you get the best deal.

• Apply for a new policy. Fill out the application form or connect with an agent to secure new coverage. If you can’t find a standard policy, consider your state’s FAIR Plan, which offers last-resort insurance for high-risk properties.

Homeowners insurance in fire-prone areas FAQs