Private Client Insurance Navigating Wildfire Risks and Coverage Options

Private Client Insurance: Navigating Wildfire Risks and Coverage Options


In recent years, the world has borne witness to a troubling trend: the relentless rise in the frequency and ferocity of natural disasters, with wildfires standing out as one of the most formidable foes nature has unleashed. For private clients who own high-value properties, the threat of wildfires is not just a concern; it’s a potential nightmare waiting to happen. In this blog post, I’ll guide you through the escalating wildfire risks and delve into insurance strategies to protect your valuable assets. From fortifying your disaster preparedness to deciphering nuanced coverage options and streamlining claims processes, my aim is to empower you with the knowledge you need to safeguard what matters most.  

The Growing Threat of Wildfires  

Wildfires have become an increasingly prominent issue in many regions across the globe, exacerbated by a combination of factors. In the United States alone, millions of acres of land are scorched by wildfires each year, posing a grave risk to both homeowners and their properties. For private clients with high-value homes, the stakes are higher, making it crucial to be prepared and well-insured.   

Understanding the Risk Factors  

Before delving into insurance strategies, let’s take a closer look at the risk factors that make high-value properties vulnerable to wildfires:  

  1. Location: Properties situated in fire-prone areas, such as those near undeveloped land, forests or grasslands, face a higher risk.  
  1. Wildlife and Vegetation: Proximity to areas with dense wildlife and vegetation increases the likelihood of wildfires.   
  1. Dry Conditions: Extended periods of drought and dry weather create ideal conditions for wildfires to ignite and spread.  
  1. Wind Patterns: Local wind patterns can quickly carry flames toward properties, making wind direction a significant factor in wildfire risk assessment. It’s also worth mentioning the devastating consequences of powerlines falling, which have ignited catastrophic fires in the past, such as the Campfire and Maui incidents.  
  1. Human Activities: Activities like campfires, discarded cigarettes, and even arson can act as triggers for wildfires.   

  Disaster Preparedness  

Being proactive is the first step in safeguarding your high-value property from wildfire risks:  

  1. Create a Defensible Space: Clear vegetation and create a defensible space around your property by maintaining a safe distance between trees and structures.  
  1. Fire-Resistant Landscaping: Choose fire-resistant plants and materials for landscaping to reduce fuel for wildfires.  
  1. Home Hardening: Retrofit your home with fire-resistant materials, such as Class A roofing, tempered glass windows, and ember-resistant vents.    
  1. Clear Rain Gutters: Regularly clear rain gutters around your property. Removing debris and leaves helps prevent potential fire hazards and ensures that water drainage systems function effectively. This simple but often overlooked step can make a significant difference in disaster preparedness.  
  1. Personal Contents: To facilitate a smoother recovery in the event of a loss, consider thoroughly documenting all personal contents through video recording. Store this documentation securely, either in a highly-rated fireproof safe, the cloud, or an off-site location such as a bank vault.  
  1. Emergency Kits: Prepare emergency kits with essential supplies, including first-aid items, non-perishable food, water, and important documents. 

Insurance Coverage Options  

Now that you’ve taken steps to protect your property, it’s time to explore insurance options tailored to wildfire risks:  

  1. Wildfire Security: Understanding wildfire caps, high wildfire deductibles, and exclusions related to your coverage is paramount. Many policies today have exclusions for smoke damage and other nuances. Scrutinize your policy meticulously to avoid surprises.  
  1. Comprehensive Homeowners Insurance: Review your homeowners insurance policy to ensure it covers wildfire and wildfire-related damage. Make sure it includes dwelling coverage, other structures coverage, personal property coverage, and additional living expenses coverage in case you need to evacuate.  
  1. Loss of Use Coverage: This type of coverage helps with expenses incurred if you need to temporarily live elsewhere due to wildfire damage to your home.  
  1. Valuable Items Insurance: If you have valuable possessions, consider insuring these items on a separate rider to ensure they’re adequately protected.  
  1. Loss Assessment Coverage (HOA): If you are a homeowner within a homeowners association (HOA), it’s important to be aware of the potential financial responsibilities you may face in the event of a wildfire that damages common areas or shared structures within your community. Loss Assessment Coverage is a safeguard against unexpected assessments levied by the HOA to cover these damages.  

The Claims Process  

In the unfortunate event of a wildfire-related incident, knowing how to navigate the claims process is crucial:  

  1. Contact Your Insurer: Notify your insurance company as soon as possible. They will guide you through the claims process, providing necessary forms and instructions. It’s also important to note that collaborating with a broker who has an internal claims team can prove to be invaluable as you navigate the claims process.   
  1. Document Damage: To expedite your claim, meticulously document the extent of the damage through comprehensive photographs and detailed descriptions. This complements the video documentation mentioned earlier.  
  1. Temporary Repairs: If necessary, make temporary repairs to prevent further damage, but keep all receipts for reimbursement.  
  1. Stay Organized: Keep all communication with your insurance company organized, including claim numbers and contact information.  
  1. Review Your Policy: Understand your policy’s coverage limits and exclusions to ensure you receive the maximum benefits you’re entitled to.  

In conclusion, as wildfires continue to pose a growing threat to high-value properties, private clients must take proactive steps to protect their investments. Disaster preparedness, comprehensive insurance coverage, and knowledge of the claims process are essential elements in safeguarding your assets. By staying informed and well-prepared, you can weather the wildfire storm with confidence, knowing that your property and financial well-being are secure.  

For more information on Liberty’s Private Client Practice, please reach out to Steve Rivera, Partner, The Liberty Company Insurance Brokers.  

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