What you need to know about insurance when it comes to wildfires
One of the key takeaways of last year's January wildfires was that most Southern Californians are underinsured, as many as half of all homeowners in fact.
Homeowners often rely on an insurer's computer models to tell them how much coverage they need. But as many Palisades and Eaton fire survivors learned, those models don't always align with reality.
Insurance experts say 2026 should be the year Californians make sure they can rebuild if their home is destroyed by a wildfire.
Insurance expert Karl Susman said homeowners do not want to be under $500 per square foot and reminds people that the number is separate from the value of the property. Susman said it can be cost-prohibitive for some to increase coverage to that level.
"Everybody wants to spend as little as they can on insurance until there's a claim," Susman said. "You have to try and find that space where you're comfortable as a consumer."
Raising your deductible is one way to up your coverage without increasing your premium to a point that is unaffordable.
"I would much rather see a much higher deductible and more coverage than not because at the end of the day, these are insurance policies for disasters," Susman said. "I know it sounds daunting to go to a $10,000 deductible or a 15 or $20,000 deductible, but when you're looking at the house being rebuilt from scratch, all of a sudden it's yeah, fine and that can make a serious dent in your premium."
For the average middle-class family that may not have expendable income to have as their deductible, Susman recommends they start at $5,000.
Whether you're a homeowner or a renter, Susman advises everyone to have a digital inventory of everything inside their home. Take cell phone video of each room so you know what you lost in the event of a fire and when it comes to personal property for homeowners or renters, that's another area where you can cut back on coverage in order to lower your premium.
If you're a renter and you have a roommate who isn't a spouse or dependent, they need their own policy, even if you share belongings like furniture. Susman said insurers are beginning to return to the California marketplace in 2026. Mercury, for instance, just committed to writing 38,000 new homeowner's policies.
"We're going to be in a situation where we're seeing carriers that we recognize that are actually offering coverage and they're going to be giving substantial discounts for things that we do to make the home safer," Susman said. "For example, doing things like keeping trees off of your roof, keeping the vines from crawling up the side of your house, keeping things like that done to make your house less likely to burn, instead of it saving you 3 or 4% on your premium, you could be looking at 20% off, 30% off."