As wildfires become more frequent and severe in many parts of the country, Homeowners Associations (HOAs) must take proactive steps to safeguard their communities. The risks posed by wildfire events are broad and complex, and it’s important to know how to protect everything from your physical structures, to your landscaping, to (most important of all) your residents’ well-being.
At Blue Lime Insurance, we specialize in helping HOAs navigate these challenges by ensuring the right wildfire insurance protections are in place—and by offering risk management insights that can make a real difference as you prepare for fire emergencies. Here’s what every HOA board needs to know about wildfire coverage and preparedness.
Why Wildfire Coverage Matters for HOAs
Wildfires can erupt with little warning, and they often spread rapidly, especially in dry, windy conditions. For communities near open space, forests, or brush-covered areas, the threat is even more pronounced.
A wildfire can affect an HOA in several ways:
- Damage or destruction of common area property (clubhouses, landscaping, pools) (Note: Even if a fire doesn’t directly reach a property, smoke and heat damage may still occur, leading to significant repair costs.)
- Loss of income (from rental or usage fees)
- Liability for injuries or damage to neighboring properties
- Displacement of residents
- Legal or regulatory expenses after the event
For all these reasons, having the right insurance—and a strong risk mitigation plan—is essential.
Let’s explore the specific types of insurance coverage that can protect your HOA when wildfires strike.
Key HOA Insurance Coverages for Wildfire Protection
1. Property Insurance (Commercial Package Policy)
Property insurance covers physical structures owned by the HOA. This can include clubhouses, pools, fences, signage, and shared roofs in townhome or condo developments. In wildfire-prone areas, it’s crucial that this policy includes:
- Replacement cost coverage (not actual cash value) to rebuild structures without depreciation
- Extended or guaranteed replacement cost endorsements (which account for the increased cost of labor and materials after a disaster)
- Debris removal coverage to clean up after damage
- Ordinance or law coverage to help with the cost of rebuilding to code, in case regulations have changed since the original construction
2. General Liability Insurance
This policy protects the HOA if someone is injured on the property or if the HOA is found liable for third-party property damage. In a wildfire scenario, this could apply if:
- Debris or fire spreads from HOA-managed land to a neighboring property
- A resident or guest is injured due to insufficient evacuation procedures, poorly maintained fire exits, or some other potential fault of the HOA
Ensure your policy includes high enough limits. Most HOAs carry at least $1 million per occurrence and $2 million aggregate, but wildfire-prone communities may want to consider higher thresholds.
3. Directors and Officers (D&O) Insurance
Board members can be sued for perceived negligence if a wildfire damages the community and residents believe more could have been done. D&O coverage protects board members from personal liability and covers legal defense costs.
Wildfire-triggered D&O claims might stem from:
- Poor emergency planning
- Failure to clear vegetation or maintain firebreaks
- Lack of adequate insurance or funding for recovery
4. Loss Assessment Coverage
When a wildfire damages shared community property and the insurance doesn’t cover all the repairs, the HOA may issue a special assessment to homeowners. Loss assessment coverage (typically added to individual homeowners’ policies) can help offset these costs. It’s smart for HOAs to encourage or require unit owners to carry this coverage.
5. Business Interruption Insurance
If your HOA generates income from rental facilities, community events, or shared-use amenities, a wildfire could cause a loss of revenue. Business interruption insurance can help cover this income gap while facilities are closed for repair.
6. Workers’ Compensation and Contractor Coverage
If your HOA employs on-site staff or hires vendors for landscaping and maintenance, ensure that proper workers’ compensation coverage is in place. Wildfire events can put these workers at increased risk of injury, and you’ll want to make sure all scenarios are covered.
Also, verify that your vendors carry adequate liability and workers’ comp insurance, in case their work contributes to fire spread or causes injury during cleanup efforts.
How to Improve Wildfire Safety and Preparedness in Your HOA Community
Having the right HOA insurance is critical, but it’s really only half the equation. The best defense against wildfire damage is prevention. Risk reduction strategies can help your HOA avoid losses in the first place. In fact, some strategies may even lower your premiums. Here are some proactive steps HOAs can take to increase fire safety.
1. Create and Enforce a Defensible Space Policy
Defensible space is a buffer zone between structures and combustible vegetation. Consider enforcing guidelines like:
- Keeping areas within 30 feet of buildings clear from dead plants, weeds, and dry grass
- Trimming tree branches to remain at least 10 feet from chimneys and rooftops
- Maintaining irrigation systems regularly
- Replacing highly flammable plants
2. Use Fire-Resistant Building Materials
When repairing or upgrading shared facilities, opt for materials that resist ignition, such as:
- Metal or tile roofing
- Stucco or fiber cement siding
- Tempered glass windows
In addition, install fire-rated doors and sprinkler systems whenever possible.
3. Conduct Annual Fire Risk Assessments
Partner with your local fire department or a private fire risk consultant to evaluate your property annually. These assessments help identify vulnerabilities and prioritize improvements.
4. Implement an Emergency Communication and Evacuation Plan
An HOA should have a clearly outlined emergency communication and evacuation plan, including:
- A phone/email/text alert system for residents
- Posted evacuation routes and meeting points
- Procedures for helping residents with mobility issues
- Designated board members responsible for communication and coordination
Tip: Include backup methods like walkie-talkies or air horns to help spread alerts in case of power outages.
5. Partner with Local Fire Services
Building relationships with local fire agencies can provide access to resources like:
- Community fire drills
- Wildfire education programs
- Grant opportunities for fire mitigation efforts
Additionally, use tools like the National Interagency Fire Center or local fire authorities’ websites to monitor wildfire conditions. On high-alert days, notify residents and restrict activities that could spark fires.
Partnering with Blue Lime for Peace of Mind
At Blue Lime Insurance, we understand the complex insurance needs of HOA communities, even when it comes to natural disasters like wildfires. Our experienced team can help your board assess current risks, identify coverage gaps, and secure policies that provide real peace of mind.
Wildfires are an unfortunate reality for many communities—but they don’t have to spell disaster. With the right insurance protections and a proactive safety strategy, your HOA can face fire season with confidence. From property damage to legal liabilities, Blue Lime Insurance is here to make sure you’re protected from every angle.
We would be happy to work with your HOA to review your current policies. Reach out to our team today to get started.
