Does Home Insurance Cover Fire?
Does home insurance cover fire?
All standard home insurance policies in Canada cover fire damage. This includes wildfires, forest fires, and all fires that are not intentionally set by a household member. Your insurance policy also covers additional living costs, such as hotel stays and restaurant meals, if you’re displaced from your home by a fire or mandatory evacuation.
What fire damage is typically covered by home insurance?
Home insurance coverage for fires typically falls into three categories:
Fire and smoke damage is covered by home insurance across a wide variety of circumstances. Your policy may cover fire damage if it was caused by:
- Wildfires
- Lightning
- Cooking mishaps
- Candles
- Fireplaces
- Electronics or appliances
- Faulty wiring
- Gas leaks
In addition to direct damage by fire and smoke, your policy may also cover vandalism and water damage if they’re linked to a house fire.
What types of fire damage may not be covered?
Fire insurance is the foundation of all Canadian home insurance policies, but there are a handful of circumstances where fire damage may not be covered:
If you’ve experienced a loss due to fire, check your policy to see if your contents insurance covers the full replacement cost of your items, how negligence is defined, and if any other limits exist on your fire insurance coverage.
How much coverage do you need for fire damage?
To cover damage caused by fires, your home insurance policy should include the following:
- Guaranteed replacement cost coverage for your dwelling: Covers the full cost to rebuild your home if it’s destroyed, even if the cost exceeds your dwelling coverage limit. This feature is standard on most home insurance policies in Canada, but check to see if it’s included in yours.
- Adequate coverage for your personal property: Coverage limits for personal belongings often start around 50% of your dwelling coverage limit, and may not cover your property’s full replacement cost. You should also be sure to set specific limits for high-value items like jewellery, art, bikes, or sporting equipment.
- Generous time limits for ALE/loss of use coverage: A major fire could displace you from your home for over 12 months if the structure needs to be rebuilt from the ground. Look at both the dollar limit and the time limit on your ALE coverage to consider whether it would cover your expenses if your house was destroyed.
Are wildfires covered by home insurance in Canada?
Home insurance covers damage from wildfires in Canada. It’s a standard feature of all homeowners insurance plans across the nation and one of the only natural disasters that’s consistently covered by home insurance without endorsements.
In addition to the standard fire insurance coverage offered by all policies, some home insurance providers offer an extra benefit for homeowners living in wildfire-prone areas like Alberta, British Columbia, Saskatchewan, Manitoba, and northwestern Ontario. Carriers partner with Wildfire Defense Systems (WDS) to provide real-time wildfire mitigation services to properties in the line of an active wildfire, thus reducing the risk to both insurers and policyholders.
Are wildfires driving Canada towards an insurance crisis?
Since the early 2000s, Canada has seen annual insured losses from wildfires increase nearly tenfold, from an average of $84 million between 2003 and 2014 to a staggering $706 million per year from 2015 to 2025.
As wildfire losses put higher burdens on Canadian insurance companies, experts warn that fire-prone provinces run the risk of facing an insurance crisis similar to the one playing out in California, where as many as one in 10 homes is uninsured due to wildfire risk. Their recommendation? Canadian insurers must focus on risk mitigation strategies to keep insurance accessible and affordable for homeowners while maintaining a competitive industry.
If you live in a fire-prone area, follow the wildfire preparedness strategies created by the Insurance Bureau of Canada (IBC) and the Institute for Catastrophic Loss Reduction (ICLR) to reduce your home’s wildfire risk and improve your fire insurance coverage.
How to file a home insurance claim for fire damage
If your home is damaged by a fire, try to file a home insurance claim as soon as possible. Here’s a quick checklist for that process:
- Start a loss of use claim right away: If you’re displaced from your home by a fire, you can start a claim for additional living expenses (such as temporary accommodations) immediately. You don’t need to wait to return to your home or confirm any damage, just contact your insurance representative.
- Document damage once it’s safe to do so: Once you’re able to, take photographs and video of any damage to your home and your possessions. The more documentation, the better.
- Contact your insurance company: Let them know that your home was damaged by a fire and that you’d like to make a claim. They’ll assign an insurance adjuster to walk you through the claims process.
- Fill out a proof of loss form: Your insurance company will provide this. Be prepared to carefully describe all property damage caused by fire and smoke, and attach photos, videos, receipts, and other documents to verify both the damage and the value of the affected property.
- Take notes in every conversation with your adjuster: Fire insurance claims can take a while to resolve, especially if the damage is extensive. Always take notes when speaking with an insurance representative and keep your records of the claim organized and readily accessible.
Once the insurance adjuster has reviewed the evidence, inspected your home, and spoken with you, they’ll determine the amount of your final payout. In some cases, the insurance company will pay you directly via a cheque, while in other cases they’ll send payment directly to the contractor(s) working to rebuild your property. In either case, expect your total payout to factor in the insurance deductible you’re responsible for.
Bundling home and auto insurance can simplify the process of filing insurance claims after a fire. If you’re only dealing with one carrier for both home and car insurance, you won’t need to go through multiple adjusters and offices to file—and you’ll save money on premiums.
Will home insurance premiums go up after a fire?
If you file an insurance claim for fire damage, your home insurance premium is likely to increase at your next policy renewal. This increase isn’t necessarily a penalty. There are a few reasons your insurance rate could go up after a fire claim:
- You’ve lost a claims-free discount you were previously entitled to
- Multiple homes in your area were affected by fire, and your insurer has changed their pricing models to account for the added risk
- Your claim moved you into a higher-risk pricing tier based on your current provider’s models
If you see an increase in your home insurance costs following a house fire, you may be able to lower your rates by:
- Upgrading basic smoke detectors to a centrally-monitored alarm system
- Installing sprinklers and fire extinguishers in your home
- Requesting home insurance quotes from other providers to find a competitive price
FAQ: Does home insurance cover fire?
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.