U.S. Home Insurance Hit With $5.5 Billion in Wildfire Damage

TAMPA, Fla., June 27, 2025 /PRNewswire/ -- USInsuranceAgents.com recently published a report revealing how home insurance covers wildfires. According to the report, the cost of damages from wildfires was $1.2 billion in 2015, and it rose to $5.5 billion by 2024. The general trend over the past decade has been that wildfires are causing increasingly higher-cost damage.

Throughout the U.S., home insurance covers damage from wildfires the same as it covers damage from kitchen fires. Standard coverage protects against financial losses resulting from wildfires.

The increasing fire risk and rising damage costs are prompting many insurers to withdraw from specific markets, resulting in significant premium increases.

Wildfires and Home Insurance

Wildfires are a covered peril under most home insurance policies. While homeowners need separate coverage for damage from floods or earthquakes, they do not need a separate policy for wildfires.

There are a few areas in the U.S. where wildfires are more common, and homeowners in these areas may struggle to find coverage.

California wildfires have recently caused devastation, and many homeowners in those areas were not prepared with adequate home insurance coverage because their home insurance policy had dropped them, and they couldn't find an alternative option.

Options for High-Risk Homeowners

In California, homeowners who can't find standard home insurance because of their risk can purchase a California Fair Access to Insurance Requirements (FAIR). These plans enable homeowners to obtain insurance that satisfies lender requirements, but they have limitations and high premiums.

Melanie Musson, a nationally recognized home insurance expert with USInsuranceAgents.com, urges homeowners to "Compare local markets and try to find coverage on the competitive marketplace. FAIR plans will not have as many options and will have more restrictions."

Minimizing Wildfire Risk

According to USInsuranceAgents.com, homeowners can take steps to protect their homes from wildfire damage. Taking these precautions may qualify homeowners for insurance with some companies. Homeowners may also be eligible for discounts by completing these steps.

• Create a defensible space
• Use fire-resistant building materials
• Maintain the home

If the current trends for wildfires in the U.S. continue, more homeowners will face a struggle to find home insurance.

State plans, while inferior, provide valuable coverage as a last resort.

Read USInsuranceAgents.com's entire report here: Are wildfires covered by home insurance in 2025? (What You Need to Know)

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SOURCE USInsuranceAgents.com