Wildfire & Home Insurance: What San Diego Homeowners Need to Know

What coverage should homeowners prioritize right now?

In San Diego, adequate dwelling coverage is critical - it should reflect today’s rebuild cost, not market value. I also recommend extended replacement cost, ordinance or law coverage, and strong loss of use limits to help cover living expenses during a rebuild.

Just as important is liability coverage, which protects your assets if someone is injured on your property or you’re held responsible for damages. Many homeowners overlook how liability exposure can extend beyond the home - for example, low auto liability limits can also put personal assets like savings or real estate at risk after a serious accident. For that reason, many homeowners choose higher liability limits and often add an umbrella policy for additional protection.

Wildfire is the headline risk in our region, but having the right structure and liability protection in place is what truly safeguards homeowners after a loss.

How have recent wildfires affected rates and availability?

The increase in wildfire frequency and severity across California in recent years has significantly impacted the insurance market. Carriers have become more cautious about wildfire exposure, which has led to stricter underwriting guidelines, higher premiums, and in some cases fewer companies willing to write policies in higher-risk areas.

That said, the market hasn’t disappeared - it has simply become more selective. Many insurers are now placing a stronger emphasis on home hardening and defensible space, and some are beginning to offer discounts or eligibility incentives for wildfire mitigation efforts such as cleared vegetation zones, fire-resistant roofing, ember-resistant vents, and other safety improvements.

Homeowners who take proactive steps to reduce wildfire risk are often in a better position when it comes to both qualifying for coverage and managing costs.

What should homeowners know about fire mitigation?

Insurers are placing much more emphasis on fire mitigation and property maintenance. Common requirements include defensible space, cleared brush, Class A fire-rated roofing, and ember-resistant vents. Carriers are increasingly using aerial imagery and third-party inspections to evaluate properties.

Roof condition is also a major factor. Older roofs or those in poor condition can limit the types of policies a homeowner qualifies for, and in some cases may lead to non-renewal notices until the roof is replaced. Maintaining a roof in good condition, or completing a full replacement when needed, can make a significant difference in both eligibility and coverage options.

If a homeowner receives a mitigation notice from their insurer, it’s important to address it quickly, as failure to complete required improvements can lead to cancellation or non-renewal.

What is the California FAIR Plan?

The California FAIR Plan Association is the state’s insurer of last resort for fire coverage when traditional carriers decline. It typically requires a companion policy to provide full homeowners protection.

Can homeowners lower premiums in high-risk areas?

You can’t change location, but you can improve eligibility. Property hardening, defensible space, monitored alarms, and bundling policies can help. In high-risk zones, qualifying for coverage is often more important than small premium savings.

How do insurers assess fire risk?

They evaluate fire severity zones, brush proximity, slope, roof material, satellite imagery, and claims history. Maintenance and mitigation directly impact insurability.

Replacement Cost vs. Actual Cash Value — why does it matter?

Replacement Cost coverage pays to rebuild or repair your home at today’s construction costs, while Actual Cash Value subtracts depreciation based on the age and condition of materials.

After a fire or major loss, that difference can mean tens of thousands of dollars in out-of-pocket costs for a homeowner. Most homeowners should carry replacement cost coverage to ensure they can fully rebuild.

It’s also important to note that if a home has a mortgage, lenders typically require replacement cost coverage. If adequate coverage isn’t maintained, the lender may place force-placed insurance on the property, which is often more expensive and provides much more limited protection.

What if a homeowner is non-renewed or denied?

Don’t panic, but act quickly. Work with an independent broker, explore multiple markets, complete mitigation, and review all available options, including the FAIR Plan if necessary.

It’s also important to make sure the home is in insurable condition. Major maintenance issues, such as roof damage, leaks, electrical hazards, or conditions that increase fire or water risk, can make it difficult to qualify for coverage. Addressing these items and maintaining the property well can significantly improve a homeowner’s chances of securing a new policy.

What trends should homeowners watch?

Homeowners can expect continued pricing adjustments, stricter underwriting standards, and more documentation requirements from insurers. Carriers are also placing a growing emphasis on property resilience, including defensible space for wildfire protection and proactive steps to reduce common losses like water damage.

For example, some insurers are beginning to require or offer discounts for automatic water shut-off valve devices, which can detect leaks and stop water flow before a major loss occurs.

Insurance is no longer something to think about only at closing - it’s increasingly becoming part of long-term property planning for homeowners in San Diego.

Professional Bio

Kady Smith is a San Diego-based insurance broker with Kady Smith Insurance Agency affiliated with Farmers. She specializes in homeowners, high-value property, and risk management strategies in wildfire-exposed areas. Kady works closely with homeowners and real estate professionals to structure proactive coverage solutions in California’s evolving insurance market. She focuses on education, long-term planning, and helping clients navigate complex underwriting environments with clarity and confidence.