It is forest fire season in Canada and that means that insurance companies are watching where fires are burning in your neck of the woods. For example, on Vancouver Island as of writing this article there are two forest fires. Insurers have rules around insuring homes near forest fires and therefore you getting insurance on your new home purchase could be in jeopardy. 


Recently State Farm advised it was no longer underwriting home insurance in California due to the continued fire hazard in the State. For perspective, State Farm’s market share of insurance in California was 19.9% in 2021. Forest fires cause significant financial damage to insurance companies and at some point they will decide the reward is not worth the risk.


In BC, when getting your home insurance it is important to ask some questions. Ask if your home insurance covers you in case of wildfire damage and is there additional coverage for additional living expenses if your house does burn down? Ask about flood insurance, wind damage, earthquake damage. Then you can decide which natural disasters you wish to get coverage for. 


When purchasing a home it is important to get your home insurance quote and have the insurer issue a binder (this is different from a quote). A quote summarises what you are being offered and the price of the insurance. When an insurance company BINDS an insurance policy it means they have actually issued the policy and will come into effect on an agreed upon date. Once a policy has been bound, the policy generally will be honoured.