Wildfire and Home Insurance: What Canadian Homeowners Need to Know

Canada is experiencing a wildfire crisis. The 2023 wildfire season burned a record 18.5 million hectares — an area larger than the entire state of Florida. The 2024 and 2025 seasons continued the trend of longer, more destructive fire seasons, with insured losses climbing into the billions.

For homeowners in British Columbia, Alberta, Saskatchewan, Ontario's north, and the Northwest Territories, wildfire is no longer a distant possibility — it's a recurring risk that directly impacts insurance availability and cost.

The good news: fire damage is covered by standard home insurance. You don't need a special endorsement. But understanding exactly what's covered, what your limits are, and how wildfire risk is changing your premium is essential.

Fire is a named peril on every Canadian home insurance policy. If a wildfire reaches your property, your standard coverage includes:

• Dwelling coverage: Repair or full rebuild of your home if it's damaged or destroyed by fire. This covers the structure, roof, walls, foundation, and attached structures like a garage or deck.
• Detached structures: Sheds, fences, and other outbuildings on your property are typically covered up to 10% of your dwelling limit.
• Personal property: Furniture, clothing, electronics, and other belongings destroyed by fire, heat, or smoke. Coverage is usually 50% to 70% of your dwelling limit.
• Additional living expenses (ALE): Hotel stays, restaurant meals, laundry, and other reasonable costs if your home is uninhabitable — typically up to 20% to 30% of your dwelling limit.
• Debris removal: The cost of clearing burned wreckage from your property before rebuilding.
• Smoke damage: Damage to interiors, fabrics, HVAC systems, and surfaces caused by smoke infiltration.

While fire coverage is broad, there are important exclusions and gaps:

• Landscaping and mature trees: Most policies offer minimal coverage for landscaping — typically $500 to $1,000 per tree, with a total cap of $5,000 to $10,000. If wildfire destroys decades-old trees on your property, replacement costs far exceed what insurance pays.
• Underinsurance: This is the biggest risk. If your dwelling coverage hasn't kept up with rising construction costs, you may receive far less than it actually costs to rebuild. Construction materials and labour in Canada have risen 30% to 50% since 2020 in many regions.
• Flood damage after fire: Burned land loses its ability to absorb rainfall, which can cause post-fire flooding in your area. This flooding is not covered under fire coverage — you need overland water coverage.
• Voluntary evacuation: ALE coverage typically applies only when a mandatory evacuation order is issued by authorities. If you leave voluntarily before an order is given, some insurers may not cover your expenses.
• Business equipment: If you work from home, your business equipment may require separate coverage.

When a wildfire threatens your community, understanding your insurance coverage during an evacuation can reduce stress considerably:

Before You Leave

• Take critical documents: Insurance policy, identification, financial records. Better yet, store digital copies in the cloud.
• Photograph your home: Walk through every room and take video. This documents the state of your belongings and home before potential damage.
• Take irreplaceable items: Family photos, heirlooms, and sentimental items that insurance cannot truly replace.

During Evacuation

• Keep every receipt: Hotels, meals, gas, pet boarding, clothing — everything related to your displacement. Your ALE coverage will reimburse reasonable expenses.
• "Reasonable" is key: Insurers expect you to make practical choices. A mid-range hotel is covered; a luxury resort suite may not be. Extended-stay hotels and short-term rentals are often the most cost-effective option for longer evacuations.
• Contact your insurer early: Don't wait until you return home to report. Call as soon as an evacuation order is issued — many insurers activate emergency response teams for large wildfire events.

After the Evacuation

• Do not enter your home until authorities clear the area. Structural damage, toxic ash, and compromised utilities create serious safety hazards.
• Document all damage with photos and video before touching or moving anything.
• File your claim promptly. After a major wildfire, adjusters are in high demand. Filing early gets you into the queue sooner.

Wildfire risk is one of the fastest-growing factors in Canadian home insurance pricing. Here's what's happening:

• Regional premium increases: Homeowners in wildfire-prone areas of BC and Alberta have seen premiums rise 15% to 40% in recent years, well above the national average increase
• Area-wide impact: After a major wildfire event, every home in the affected postal code may see a premium increase — not just those that were damaged. Insurers recalculate the risk for the entire region
• Non-renewals: Some insurers are choosing to exit the highest-risk wildfire areas entirely, declining to renew existing policies. This forces homeowners to find alternative coverage, often at significantly higher rates
• New risk modelling: Insurers now use satellite imagery, vegetation data, and climate projections to assess wildfire risk at the individual property level — not just by postal code

If you live in a wildfire-prone area and your premium has increased sharply, shop around. Different insurers use different risk models, and you may find significantly different pricing for the same property.

FireSmart Canada is a national program that provides homeowners with practical steps to reduce wildfire risk. Following FireSmart principles can protect your property — and some insurers are beginning to offer premium discounts for FireSmart-compliant homes.

Priority Zone 1: The Immediate Zone (0–1.5 metres)

• Use non-combustible materials for decking, siding, and roofing within 1.5 metres of the structure
• Remove all combustible materials from directly against the house — firewood, propane tanks, recycling bins
• Clean gutters regularly to remove dried leaves and needles
• Ensure vents are screened with 3mm metal mesh to prevent ember entry

Priority Zone 2: The Intermediate Zone (1.5–10 metres)

• Space trees so their crowns are at least 3 metres apart
• Remove dead branches and vegetation
• Keep grass mowed to 10 cm or less
• Store firewood at least 10 metres from the house

Priority Zone 3: The Extended Zone (10–30 metres)

• Thin trees and remove deadfall to reduce fire intensity
• Create fuel breaks using gravel paths, driveways, or irrigated gardens
• Remove continuous vegetation that could carry fire from the forest to your property

A FireSmart assessment by a certified professional costs $200 to $500 and provides a prioritized action plan. Some municipalities offer free assessments.

One of the biggest financial risks homeowners face after a wildfire is discovering they are underinsured. Your dwelling coverage is supposed to reflect the cost to rebuild your home — but actual rebuild costs after a wildfire event are often far higher than expected:

• Construction surge pricing: When dozens or hundreds of homes in a community need rebuilding simultaneously, contractors and materials are in extreme demand. Costs can rise 30% to 60% above normal
• Updated building codes: When you rebuild, you must meet current building codes — which may be significantly more stringent (and expensive) than when your home was originally built
• Demolition and site preparation: Clearing fire debris, decontaminating soil, and preparing the site for rebuilding adds costs that many homeowners don't anticipate

How to Protect Yourself

• Review your dwelling coverage annually and ensure it reflects current construction costs, not your home's market value
• Ask about guaranteed replacement cost: This endorsement pays to rebuild your home regardless of the cost, even if it exceeds your policy limit. It's the strongest protection against underinsurance
• Include an inflation guard: This endorsement automatically increases your dwelling coverage each year to keep pace with rising construction costs

Wildfire is one of the few catastrophic risks that standard home insurance actually covers — but coverage alone isn't enough. You need to ensure your dwelling limit reflects real rebuild costs, your ALE coverage is sufficient for a potential multi-month displacement, and your property is prepared with FireSmart principles.

If you live in a wildfire-prone region of Canada, take three steps today: review your policy limits, photograph your belongings, and start a FireSmart assessment of your property. The combination of adequate insurance and active prevention is the strongest protection available against Canada's growing wildfire threat.