Haris Ashley
As wildfires become increasingly common and destructive, it is important to understand whether your home insurance covers wildfire damage. USAA, a leading financial services provider for the military community, has paid out more than $1 billion in claims for the 2025 Los Angeles wildfires, making it the third insurer to reach this figure. The company has stated that it is deeply committed to supporting our members during this challenging time. However, it is worth noting that USAA has also come under scrutiny for its denial rate of homeowner insurance claims, with nearly half of all claims nationwide in 2023 being closed without payment, according to Weiss Ratings. While USAA disputed these findings, the increasing incidence and severity of wildfires due to climate change have led to greater scrutiny of insurance companies' claim rejection rates.
| Characteristics | Values |
|---|---|
| Homeowners insurance covers wildfire damage | Yes, typically |
| USAA homeowners insurance covers wildfire damage | Yes |
| USAA insurance denial rate | Poor, according to Weiss Ratings |
| USAA's response to wildfire claims | Activated its Wildfire Response Program to assist members |
| USAA's average home insurance policy cost | $1,270 annually for $350,000 dwelling coverage |
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What You'll Learn
USAA has paid out over $1 billion in wildfire claims
USAA, a leading financial services provider for the military community, has paid out more than $1 billion for the Los Angeles wildfires. This makes it the third insurer to report $1 billion or more in payouts for the blazes that destroyed thousands of properties.
The San Antonio, Texas-based company reported more than 3,500 claims received and is projecting it will ultimately pay out $1.8 billion in losses from the wildfires. USAA's president of property and casualty, Randy Termeer, said:
> "USAA is deeply committed to supporting our members during this challenging time. We understand the significant impact these wildfires have on our members and their families, and by moving quickly to put money in our members' hands, they are empowered to take the first steps towards rebuilding their lives. Our team is working tirelessly to ensure that our members receive the assistance they need to recover and rebuild."
USAA has also assisted members through its activation of its Wildfire Response Program, which automatically enrolls eligible members in at-risk areas at no additional cost. This program provides wildfire response services, including property damage assessment and the application of fire retardants. Additionally, USAA offers a wide range of resources to help members navigate recovery and rebuilding efforts, such as access to FEMA assistance, emergency shelters, and financial relief programs.
While USAA has demonstrated its commitment to supporting its members during the wildfires, it is important to note that the company has faced scrutiny in the past for its denial rate on homeowners' claims. According to Weiss Ratings, USAA and its affiliate insurers closed nearly half of all claims nationwide without making a payment in 2023, one of the highest rates in the country. However, USAA has disputed these findings, citing issues with the data organization and portrayal of claim payment rates.
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Homeowners insurance typically covers wildfire damage
USAA, a leading financial services provider for the military community, has paid out more than $1 billion in claims related to the 2025 Los Angeles wildfires, making it the third insurer to reach this figure. The company has stated that it is "deeply committed to supporting our members during this challenging time" and has provided initial payments to 86% of wildfire claims received.
USAA has also activated its Wildfire Response Program, which automatically enrolls eligible members in at-risk areas at no additional cost. This program provides wildfire response services, including property damage assessment and the application of fire retardants. Additionally, USAA offers resources to help members navigate recovery and rebuilding efforts, such as access to FEMA assistance, emergency shelters, and financial relief programs.
However, it is worth noting that USAA has come under scrutiny for its denial rate on homeowners' claims. According to Weiss Ratings, USAA and its affiliate insurers closed nearly half of all claims nationwide in 2023 without making a payment. USAA disputes these findings, citing issues with the data organization. Nonetheless, with the increasing incidence and severity of natural disasters due to climate change, insurance companies are facing greater scrutiny regarding their claims rejection rates.
To secure coverage in high-risk areas, homeowners can consider Fair Access to Insurance Requirements (FAIR) plans, which are state-sponsored insurance options offered in 33 states and Washington, D.C. These plans may help homeowners secure coverage if they have been denied by private carriers due to wildfire risk.
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USAA's Wildfire Response Program
USAA, the United Services Automobile Association, is a financial services provider for the military community. It has paid out more than $1 billion in claims for the 2025 Los Angeles wildfires, making it the third insurer to report $1 billion or more in payouts for the blazes.
- Property damage assessment
- Application of fire retardants
- Access to FEMA assistance
- Emergency shelters
- Financial relief programs
USAA has assisted members through its activation of its Wildfire Response Program, with over 3,500 claims received and an 86% initial payment rate as of February 2025. The company is projecting it will pay out $1.8 billion in losses from the wildfires.
Homeowners insurance typically covers wildfire damage, but carriers may limit or deny coverage in areas with high wildfire risk. It is important to check your homeowners policy to see if wildfire damage is covered.
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FAIR plans help homeowners in high-risk areas
FAIR plans, or Fair Access to Insurance Requirements plans, are designed to help homeowners in high-risk areas get insurance coverage. These plans are typically a last resort for those who cannot get coverage from a standard provider. As of October 2024, 33 states have implemented FAIR plans, which are financially supported by private insurance companies.
FAIR plans are specifically designed for high-risk homes and homeowners. A home may be considered high-risk if it is located in an area with a high risk of severe weather, such as tornadoes, hurricanes, or earthquakes. Other factors that may qualify a home for FAIR Plan insurance include a high rate of crime, outdated systems, or a lengthy claims history.
FAIR plans are state-run programs that allow several insurance companies to share the risk of covering a high-risk home, rather than just one. This shared market plan means that if a claim is filed, each participating company pays for a portion of the loss. FAIR plans are typically more expensive and offer limited protection compared to insurance obtained in the regular market. However, they provide an important safety net for homeowners in high-risk areas who may otherwise be unable to obtain coverage.
In California, for example, the FAIR Plan is available to residents and businesses who cannot obtain insurance through a regular insurance company. While FAIR plans are designed to provide basic insurance coverage, California has increased coverage limits to $3 million for residential policyholders and $20 million for commercial policies per location. Additionally, residential policyholders can obtain a discount on the wildfire portion of their FAIR Plan premium by hardening their properties to reduce wildfire risk.
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USAA's poor record of paying out insurance claims
USAA provides insurance services to military members, veterans, and their families. It offers low rates and quality customer service, with few complaints to state insurance departments. However, USAA has been criticised for its handling of claims. A class-action lawsuit has been filed against the company in Texas, alleging that policyholders had their vehicles deemed total losses without their agreement, resulting in revoked titles and salvaged vehicles. This suggests a pattern of coercing claimants to accept terms without full knowledge of their rights or the facts of their situation.
USAA has also been accused of providing lowball offers, attempting to minimise payouts by offering less than the claimant deserves. This tactic can pressure claimants with financial issues to accept a lower offer to receive compensation quickly. In addition, USAA does not offer guaranteed replacement coverage, which increases dwelling coverage to replace a home after a problem, regardless of rebuilding costs. This could leave homeowners vulnerable in the event of large disasters when construction costs tend to spike.
USAA's poor record in paying out insurance claims extends to its handling of wildfire damage. While homeowners insurance typically covers wildfire damage, USAA is among several companies that have paused or significantly limited writing new policies in high-risk states like California. This decision is due to the increased frequency and severity of wildfires, making it challenging for insurers to assume the financial risk. As a result, USAA and other carriers have restricted coverage in areas prone to wildfire damage, leaving homeowners vulnerable.
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Frequently asked questions
USAA has paid out over $1 billion in claims for wildfires in California and Los Angeles. However, it is unclear whether USAA covers wildfires as standard, and there is some suggestion that USAA has a high rate of denying claims.
The average USAA home insurance policy costs $1,270 annually for $350,000 dwelling coverage.
Yes, USAA insurance is only available to active military personnel, veterans, and their families.
USAA has a Wildfire Response Program that automatically enrolls eligible members in at-risk areas at no additional cost. This program provides wildfire response services, including property damage assessment and the application of fire retardants.
