There’s hope that Canada’s wildfire season won’t be as devastating this year. But as of mid-May, 130 fires raged across B.C., Alberta and Manitoba, and evacuation orders have recently been issued in some areas. As a result, many Canadians are wondering if their home insurance would cover damage from wildfire and/or smoke. Here’s what you need to know.
Does home insurance cover wildfire and related damage?
Yes. All standard home insurance policies, including tenant insurance and condo insurance, cover damage caused by wildfires and smoke. The cause of the fire doesn’t matter—as long as it was not deliberately started by the policyholder.
In addition to providing coverage for damage to the structure and the contents of the home, home insurance can cover some of the additional living expenses that come from needing to relocate, either due to an evacuation order, damage to property or damage to other homes nearby (in instances where your home has not been damaged, but it’s still too dangerous for you to live there). Eligible expenses include the costs of accommodations, food and fuel.
Note, however, that coverage for additional living expenses only applies to costs that are in excess of what you would typically spend. So, in an example provided by the Insurance Bureau of Canada (IBC), if you spend $500 per week eating out while you’re displaced from your home, and you would normally spend $100 per week on groceries, you can claim $400 in additional living expenses.
If you are indirectly impacted by a wildfire, you may still be eligible for coverage. For example, if there’s a power outage and the food in your freezer or refrigerator spoils, you may be able to receive compensation for the lost food.
Before making a claim—particularly for smaller losses such as food—consider the impact it may have on your insurance premiums, and check if the loss exceeds your insurance deductible. Making a claim can lead to paying higher premiums in the future. To save on home insurance, some insurance experts advise paying out of pocket for small claims you can afford upfront.
What if your car is damaged in a wildfire?
Unlike home insurance, auto insurance does not automatically cover damage from a fire. In fact, only comprehensive or “all perils” auto insurance policies include coverage against fire damage. These are optional coverages, so check your policy for details.
Can you change your policy during a wildfire emergency?
If you live in an area impacted by wildfire and don’t currently have home insurance, it’s unlikely that you’ll be able to obtain coverage. You may not be able to make changes to an existing policy, either. During major weather events that pose an “imminent threat,” insurance companies can temporarily limit the sale of new policies in the affected area, says the IBC.
Insurers will typically renew existing policies, and during a state of emergency declared by the local government, they may even extend your coverage for up to 120 days beyond the expiration date if the crisis prevents you from renewing on time.