With wildfires, there is a substantial risk of interruption to lives and businesses from smoke. But when it comes to insurance, smoke is not as straightforward as fire.
“I think there probably is [a gap],” said Jim Mandeville (pictured), senior vice president, large loss North America at First Onsite Property Restoration.
“We can start with what is really damage. If it smells smoky in a building, is that damage? And is it damage resultant from a covered peril? I’m not an adjuster, I can’t tell you, but I know it starts to get real sticky.”
In the case of a fire that directly damages a property, insurance claims tend to be relatively clear-cut. The destruction is visible, the cause is obvious, and the cleanup scope is well understood. Smoke, on the other hand, can be elusive, Mandeville warned. Once everyone agrees that damage has occurred, the real challenge is determining how far it has spread and how much cleaning is required.
Scientific testing has brought more clarity in recent years. Labs can now analyze particulates to determine whether they came from a wildfire, a neighbouring structure fire, or background environmental sources. “It’s really a crucial step in identifying the extent of the damage, especially when it comes to coverage concerns and costs for mitigation,” Mandeville said.
For businesses, understanding these complexities is only half the battle – the other half is acting quickly and correctly when smoke is present.
Mandeville advised both businesses and residents to take a methodical approach if wildfire smoke is a concern, starting with professional assessment and prioritizing safety. His top recommendations:
Many property owners mistakenly assume they’re safe if flames never touch their building. But, Mandeville warned, this is a costly misconception.
“When we see fires on the news, we see the flames, the burnt wood, the fire department knocking out windows. That’s obvious damage,” he said. “But the part we don’t see, especially in bigger buildings, is that smoke damage often causes many times the amount of damage in terms of cost than the actual fire does.”
Smoke can travel far beyond the fire’s point of origin – in an apartment building, it could spread through dozens of floors, causing millions of dollars in contamination and cleanup costs. Water from firefighting efforts can compound the damage further.
Another common misunderstanding is the belief that smoke cleanup is a simple DIY task. “There’s a real health and safety aspect here,” Mandeville said. “It creates a number of known carcinogens… unless you’re properly equipped, you shouldn’t be messing with it at all.”
Removing smoke residue also isn’t as simple as wiping surfaces. Different types of smoke leave distinct stains and particulates – from black and grey to even yellow – that require specific cleaning products, techniques, and expertise. “People think it’s not that big of a deal, and they try and do something about it, and then they find out very quickly that it really is a big deal,” he said.
Given the coverage nuances, brokers can help clients navigate the uncertainty before a claim arises, Mandeville said. That might mean clarifying whether smoke is a named peril in the policy, explaining the need for independent testing, or connecting SMEs with restoration experts before they attempt any cleanup.
By starting these conversations now, brokers can help clients avoid costly missteps – and be ready to respond when the air turns grey, he added.
