If you own a business, you may wonder if your commercial property insurance covers damage from wildfires. Wildfires are a serious threat in Oklahoma, especially when the during extreme summer weather, like we are experiencing now.
According to the Oklahoma Insurance Department, wildfires routinely destroy hundreds of structures every year resulting in millions of dollars in damages to property. But, does commercial property insurance cover wildfire damage?
The answer, as with most legal questions is, “It depends.”
All-risk policies
There are types of commercial property insurance policies that offer different levels of coverage for wildfire damage. One common type is all-risk policies. These policies cover all causes of loss, except those that are specifically excluded.
Wildfires are usually not excluded, unless your property is located in a high-risk area. However, some all-risk policies may have limits or deductibles for wildfire damage, which means you will have to pay more out of pocket before your insurance kicks in.
Named-peril policies
These policies only cover the causes of loss that are specifically named in the policy. Wildfires may or may not be one of the named perils, depending on your insurer and your policy. You should check your policy carefully to see if wildfires are included or excluded.
FAIR Plan policies
These are policies offered by the Fair Access to Insurance Requirements Plan Association, a state-run program that provides basic fire insurance to property owners who cannot obtain coverage from the standard market.
The FAIR Plan Commercial Fire Policy only covers fire, lightning and internal explosion. It does not cover other perils, such as smoke, water or wind damage.
Review your policy
If you have questions, ask your agent or company for clarification. You should also know what your deductible and policy limits are, and how they affect your claim. The time to add coverage is now, before you need it.