In the past several decades, large wildfires in the western United States have become more frequent and more severe. Although many wildfires take place in forested areas far from where people live and work, some recent fires have had devastating consequences for communities. The 2018 Camp Fire, for example, caused 85 deaths and destroyed nearly 19,000 properties in the town of Paradise, California. Of the top 10 fires in insured losses in the United States, eight have occurred since 2017.

Insurance is an important tool for recovering from natural disasters, including wildfires. Unlike floods, which are covered through separate flood insurance policies, wildfire damage is covered primarily through standard property and casualty insurance policies (homeowners and renters insurance). Homeowners insurance policies cover damage to the property itself, loss of contents, such as furniture, clothing, and other personal items, and sometimes additional living expenses if a house is destroyed. Lenders require that any home with a mortgage have homeowners insurance.