It could have been around 2017 when insurers, officials, residents and regulators in wildfire-prone California felt a sense of urgency when fires destroyed or damaged more than 10,000 buildings in the state, a number higher than the past nine years combined.
In terms of property damage, 2017 was the most devastating wildfire season recorded in California at the time, with 9,133 fires burning more than 1.2 million acres, and after 2017 the word “mitigation” seemed to appear more frequently and prominently in public notices about forest fires – along with warnings of rising homeowner insurance rates, increasing non-renewals and of course climate change.
As California and the drought-stricken western US stare at another historically poor forest fire season, Roy Wright continues to preach the message of containment – an idea he believes is neither too late nor the insurance industry recently started to embrace.
Wright, president and CEO of the Insurance Institute for Business and Home Safety, who joined the group a few years ago from the Federal Emergency Management Agency, has been talking about damage control for years.
And he’s confident that 2017 and subsequent years of massive California wildfires hammered that message enough to make a difference this year.
“You have the climate change narrative, you have a drought reality, you have elevated temperatures, and you have, in the best sense of the word, a timeliness bias that says, ‘We saw the devastation,'” Wright said.
These realities have led discussions in recent years about preparing and taking measures to reduce fire hazards, such as: B. the creation of defensible spaces around houses at the interface between wilderness and city.
Wright and the IBHS, an industry-backed nonprofit scientific research and communications organization, have been increasingly responding to inquiries from citizens and public officials to help forestfire brewing season.
“People specifically want to know, ‘What can I do about it?” Wright said. “What they can do at the community level, what they can do on individual parcels or on a structural level. I hear from consumers, I hear from insurance companies, I hear from politicians in California. I hear from everyone. “
The questions and go beyond the questions of how best to improve fire safety regulations, secure buildings and houses, trim bushes and do light retrofitting.
“I think what I see from the insurance industry is really a demand signal that says, ‘We need community-level responses,'” Wright said.
The California insurance commissioner Ricardo Lara called for incentives to weaken. In May, he urged property insurers in the state to do more to help residents and businesses fight forest fires. He said eight insurers and the California FAIR Plan are offering discounts to harden homes and take action to contain forest fires, which make up only 13% of the total state market.
“So there is a lot more room to grow,” Lara said at the time.
The American Property Casualty Insurers Association, the largest trading group representing property / casualty insurers, says the industry has long worked to encourage homeowners and businesses to take damage control more seriously, and that it only makes sense for the industry to do everything possible to counteract the massive insured damage that it has seen.
“Containment is a top priority,” said Karen Collins, vice president of APCIA.
Collins said record-breaking forest fire claims have been drawing industry attention for some time, and besides raising awareness of the dangers and tightening underwriting, insurers have pulled out of the riskier areas as well.
“The impact in California and other states has given insurers a break,” said Collins. “We have seen significant losses that have undermined profits for several years.”
Wright was asked what he thought of Lara’s call for insurers to offer discounts for damage control measures. He believes a broader solution is needed, which may include government grants, in other words, “a gathering of market forces”.
A recent Nature Conservancy report calling for a “paradigm shift” to increase forest fire resilience outlined policies to reduce the risk of catastrophic forest fires, including a $ 5 billion to $ 6 billion annual investment boost in the next 10 years for top priority work to reduce forest fires and provide resources for community infrastructure and adaptation.
John Putnam is a veteran of the insurance brokerage business and now owns an advisory service, Putnam Assurance & Risk Services LLC.
He believes the containment message is getting through to homeowners, but along with that message, insurance agents in places like California also need to bring bad news to their customers.
He was on the rescue team after the 2012 Colorado Waldo Canyon Fire, which destroyed nearly 350 homes and caused $ 493 million in damage in 2018. So he’s familiar with the massive devastation and grief that great forest fires can cause.
As someone on the side of both policy sales and forest fire recovery, he was anxiously watching the evolving drought and forest fire season in California and the west.
“I’m very worried,” said Putnam.
Damage control is an important tool that freight forwarders and insurance agents point out to homeowners in risk areas, but agents also need to explain to their customers why their tariffs are so high or why insurance may no longer be available in the regular market.
“They are the bearers of the bad news,” Putnam said. “If they go back with a price, that’s a conversation. If they go back with a cancellation, that’s another conversation. This is new territory for insurance agents. “
The western United States is still in a major drought. The latest US drought monitor map shows most of California under “extreme” or “exceptional” drought conditions, while the outlook for the large region is bleak.
Major forest fires are burning in several states. In Oregon, the bootleg fire, one of the largest in the state’s history, has already burned more than 476 square miles and was 25% contained.
California’s largest fire at the moment is the Dixie Fire in the northern part of the state in Butte County. The flame, which has been active for less than a week, has grown to 60,000 acres and is only 15% contained.
The National Interagency Fire Center reports that nearly 1.3 million acres were burned this year, with wildfires remaining active in 13 states.
“Seven fuel and fire behavior warnings have been issued for south / central Idaho, northern California, northern Rockies, and south / central Oregon,” states the latest NIFC fire report, which marks the latest level of forest fire preparation at 5, the highest level , classifies call for the greatest use of fire department resources. “Many of these notes describe exceptionally dry fuels, which lead to an increased fire potential and increased fire activity.”
Wright said the industry is watching all of this, but it’s not that insurers are just starting to take all of this seriously.
“For more than a decade the industry has invested in forest fire research through IBHS,” Wright said, noting that the members of the group – which comprises 76% of the country’s residential real estate insurers – each have a risk portfolio they are concerned about. “Without exception, companies for companies leaned on us and said: ‘Help us to lead the way with scientifically sound retrofit measures that we can trust.'”
IBHS published its Suburban Wildfire Adaptation Roadmaps last year, a report that identified “critical lanes” that may increase or decrease the likelihood of a home surviving a wildfire:
- Fuel management
- Building shape
- Roof fan
- Eaves overhangs
Aside from the encouraging containment of the California wildfires, the dire outlook for wildfires is making insurers spend a lot of money on modeling.
“There is a great call for pragmatic, science-based solutions that will allow us to retrofit homes that are at risk,” Wright said.
But he wants people to realize that this is not something they have just started doing.
“We have been doing this forest fire work for more than a decade,” he said.
Disaster Natural disaster in California forest fire