How do wildfires affect my real estate transaction?

In BC, wildfires have been an unfortunate re-occurring occurrence across the province. As fires can be unpredictable and sudden, it is important to be up to date of how a wildfire may affect your real estate transaction especially relating to insurance.

While almost every fire insurance policy covers for wildfires (you may want to check what any of your current policies state regarding them), being able to obtain a new insurance policy on when an active fire is happening will have an affect on your deal. There are some standard rules in regards to insuring properties/structures around active fires however you will want to verify with your broker of exactly what the rules are with your policy.


  1. The 50km radius rule.

The majority of insurance providers will not bind insurance policies within a specific radius of an active wildfire. Typically this radius is 50kms but you will need to verify exactly what it is with your provider.


  1. Think about the risks before writing a contract.

If you’re submitting an offer on a property that is in the typical wildfire “season” and perhaps one of the areas where wildfires are prone to occur, it is a good idea to ensure that a subject requiring the insurability of the property is met. Since lenders won’t mortgage and uninsured property, this could be very important as a part of your contract.


  1. Don’t just get a quote.

There is a difference between a quote and a binder, you’ll want to make sure that you request a binder. When a quote is requested and provided it will give a summary of coverages being offered and the annual premium cost. However a binder will actually bind a policy to a property, they’ve issues the policy and it will come into affect on the agreed upon date, which is typically the closing date.


  1. Don’t wait on sourcing insurance.

Since sourcing insurance can be more difficult during wildfire season, it is important to get on securing insurability and a policy as soon as you can in the process, don’t leave this detail until the last minute!


  1. Get professional advice

Like with every step in your real estate process, it is always best to seek legal advice to make sure that you are doing all of the steps properly and exactly how a wildfire may affect your transaction.

This information and more can be found on the BCREA website you can find here.