It turns out that some people who lived in the town of Paradise, CA were aware that fires could burn large parts of their community and moved out before the Camp Fire destroyed almost every home in the community in 2018. The Camp Fire ended up as one of the deadliest fires in U.S. history.

Recent fires throughout California have caused a lot of disruption in the home insurance industry. Thousands of homeowners have had their policies canceled due to fire risk, especially in Northern California. California has an insurer “of last resort,” the California FAIR Plan. This type of insurance has been available since the 1960s when the state previously experienced a lot of destructive fires. However, the basic CFP policy covers only a fraction of the things that other commercial homeowners’ insurance policies cover.

What is the point of knowing this? You should be aware of concerns about fire insurance while looking for a home to buy in California. You may find that a home and neighborhood that you love is among the ones that insurance companies are reluctant or unwilling to cover due to fire risk.

According to Jeffrey Michael, a housing policy expert from the University of the Pacific, homeowners’ policies are increasing from $2,000 to $6,000 or $8,000 a year in some areas. Michael also said that fire danger is making some homes harder to sell. In some northern California communities, the housing market is slowing due to fire risk.

Wherever you choose to buy a home, work with your real estate professional to locate a home in a neighborhood with a lower risk of fire, and check out your homeowners’ insurance policy options before you make an offer to buy.