The summer wildfire season has descended upon Canada with unnerving intensity, leaving homeowners across the country questioning whether their insurance policies will truly protect them if disaster strikes. As flames encroach on communities from British Columbia to Nova Scotia, the fine print in those insurance documents suddenly matters more than ever.
Walking through Fort McMurray last week, I witnessed firsthand the lingering trauma from the 2016 wildfires. Residents like Maryanne Clement still recall the insurance battles that followed their evacuation.
“We thought we were covered for everything,” she told me, standing in her rebuilt kitchen. “Then came the paperwork, the claims adjusters, and suddenly terms like ‘additional living expenses’ and ‘replacement cost’ became part of our daily vocabulary.”
Her experience highlights a troubling reality many Canadians face: understanding exactly what wildfire coverage includes before smoke appears on the horizon.
Standard home insurance policies in Canada typically cover fire damage, including wildfires. This protection extends to your dwelling, other structures on your property, personal belongings, and additional living expenses if you’re displaced. However, the specifics vary significantly between providers and policy types.
Rob de Pruis, National Director of Consumer and Industry Relations at the Insurance Bureau of Canada, explains that most comprehensive policies include wildfire coverage, but with important limitations.
“Many homeowners don’t realize that evacuation orders alone don’t trigger all benefits,” de Pruis said. “If you’re evacuated but your home remains undamaged, your policy might cover temporary living expenses but nothing beyond that.”
These additional living expenses (ALE) typically include reasonable costs for accommodation, food, and essential items while you’re unable to live in your home. Most policies cover these expenses for a specific time period—usually up to 24 months—but with strict dollar limits.
According to the Financial Consumer Agency of Canada, nearly 40% of homeowners haven’t reviewed their policies in over two years, leaving many uncertain about their actual coverage levels.
When wildfires swept through Jasper National Park last month, tourism operator Sarah Johnson discovered her coverage gaps too late. “My policy covered the building but severely undervalued my equipment,” she said. “The insurance amount was based on what I paid ten years ago, not what it costs to replace everything today.”
This highlights another crucial distinction: actual cash value versus replacement cost coverage. The former accounts for depreciation, while the latter—typically more expensive—covers the full cost of replacing damaged items at current prices.
Climate change has transformed wildfire risk across Canada. Insurance companies have taken notice, with some now declining coverage in high-risk areas or significantly increasing premiums.
In British Columbia’s Okanagan region, homeowner Martin Taves saw his annual premium jump from $1,800 to $3,200 last year. “The insurance representative was straightforward—it’s because we’re in a wildfire zone now,” Taves shared. “Twenty years ago, this wasn’t considered high risk.”
The Insurance Bureau of Canada reports that fire-related home insurance claims have increased by 86% over the past decade, with average claim sizes growing by nearly 40%.
Property owners in rural areas face particular challenges. Some insurers now require defensible space around structures—clearing vegetation, removing dead trees, and maintaining firebreaks—as a condition of coverage.
Jesse Bergen, a wildfire mitigation specialist with FireSmart Canada, emphasizes that homeowners should document these efforts. “Take photos of your property improvements and share them with your insurer,” Bergen advises. “It might lower your premium or help secure coverage in areas where insurers are becoming reluctant to write policies.”
Reviewing your policy before disaster strikes is essential. Pay special attention to coverage limits, deductibles, and exclusions. Most Canadians are surprised to learn that some policies limit smoke damage coverage or exclude certain outbuildings.
Insurance broker Amina Hassan recommends creating a home inventory with photos and receipts. “Without documentation, proving what you owned becomes extremely difficult during the emotional aftermath of a disaster,” she explained during a community workshop in Edmonton.
For the growing number of Canadians working from home, standard policies may not adequately cover business equipment or inventory. Home-based entrepreneurs should consider additional coverage specifically designed for business assets.
Some homeowners in high-risk areas are turning to government programs when private insurance becomes unaffordable or unavailable. Provincial disaster assistance programs exist across Canada, though they typically cover only uninsurable losses and provide basic, not comprehensive, assistance.
The Canadian government’s Disaster Financial Assistance Arrangements provides federal funding to provinces for major disasters, but this program wasn’t designed to replace private insurance.
For seasonal property owners, the situation is even more complex. Many cottage or cabin policies have stricter limitations for wildfire coverage, particularly if the property is unoccupied for extended periods.
Climate scientists project that Canada’s wildfire seasons will continue intensifying, with longer burning periods and more extreme fire behavior. This reality is reshaping the insurance landscape.
Insurance industry analyst Patrick Graham suggests homeowners should expect continued premium increases in vulnerable regions. “The industry is recalibrating risk models based on climate projections, not historical data,” Graham noted. “This fundamentally changes how fire risk is assessed and priced.”
For Canadians purchasing new homes, wildfire vulnerability should factor into buying decisions. Properties with metal roofing, fiber-cement siding, and cleared defensible space may qualify for better insurance rates.
As another summer of uncertainty unfolds, the most important step homeowners can take is thoroughly reviewing their policies before emergency strikes. Understanding exactly what’s covered—and what isn’t—provides crucial peace of mind when evacuation orders come.
The wildfire insurance landscape in Canada continues evolving with our changing climate. For now, preparation remains the best protection: document your possessions, understand your coverage limits, and create defensible space around your home. The time to address insurance questions is before smoke appears on the horizon, not after.
