Colorado hit by increasingly dire wildfire-driven insurance exit

Insurance isn’t the sexiest topic to either write or read about, but an extreme weather-driven downtrend of insurance agency availability is tightening the noose on an already suffocating national housing market.

The U.S. had its highest number — 28 — of annual billion-dollar weather disasters in 2023,  including the Lahaina wildfire, California flooding, and Tropical Cyclone Idalia in Florida, according to a NOAA report. Homeowner insurance agencies’ response to the continually rising costs has either been to drastically increase their insurance rates or to back out from certain areas entirely.

The dire situation first made national headlines last year when numerous agencies, including State Farm, Allstate and Farmers, either paused or placed heavy restrictions on policyholders in wildfire-prone areas in California. Seven of the state’s top 12 insurance agencies have put the restrictions into effect as of November, ABC News reported.

Colorado appears to be the next state to face extremely tight, or nonexistent, homeowner insurance policies caused by increasing wildfire threats. The Durango Herald recently reported the average homeowner insurance premium in the state increased 51.7 percent between January 2019 and October 2022. Meanwhile, some new homeowners in the state are having trouble getting policies at all.

“A State Farm insurance agent in Durango wrote a couple a quote for homeowners insurance. But six days before closing, the State Farm office called to inform the Bowmans that it could not write them a policy,” said the Herald’s story on a couple who recently moved to Durango. “Geico, Travelers, other State Farm agents – all of them turned him down.”

Local insurance businesses in Durango reportedly have “plummeted” by 20 to 30 percent since insurers changed their policies sometime last September. Agents in Colorado expect the insurance issues to keep piling up in the years to come. A Climate Change in Colorado Assessment report for 2024 found climate change and increased atmospheric warming will lessen streamflows and make the state drier, leading to more and worse wildfires.

“Studies have uniformly indicated substantially worsened wildfire risk for Colorado by the mid-21st century compared with the late 20th-century, as additional warming further increases fuel dryness and enhances fire ignition and spread,” the report from the Colorado Climate Center said.

Climate change info -- by Colorado State University
Climate change info — by Colorado State University

Yet another utility lawsuit over 2020 fires

A group of four law firms in Oregon and California has sued the Eugene Water and Electric Board (EWEB), Lane Electric, and Bonneville Power Administration (BPA) for their roles in the  Holiday Farm Fire east of Eugene, Oregon — part of the Labor Day fire siege of 2020.

September 2020 Oregon fires

In the approximately 200-page lawsuit, attorneys claim the three utility companies neglected to prepare electrical operations and equipment before the fire burned across 173,400 acres and destroyed more than 700 structures. The Holiday Farm Fire burned on the Willamette National Forest, BLM lands, and private property within Oregon Department of Forestry protection units. The lawsuit was filed on behalf of 238 victims who lost homes and property in the fire; the suit asks for $232 million.

As of September 10, 2020, the Holiday Farm Fire — named for a local tourist attraction called the Holiday Farm that included a wedding venue, RV resort, and year-round holiday Christmas gift shop — had burned over 144,600 acres about 14 miles up the McKenzie River from Eugene. Fire behavior and weather conditions were treacherous and kept firefighters from entering many areas, but they did protect some homes by burning out around them.

Jennifer Singh of KEZI in Eugene reported that the case was originally filed with Lane County Circuit Court against Lane Electric and EWEB — for neglecting to safeguard space around their powerlines from unstable trees and other hazards, but new records have revealed evidence that BPA also played a role in the disaster.

The lawsuit should come as no surprise to anyone — except maybe BPA — because local residents and fire officials were discussing the likelihood that the Holiday Farm Fire was ignited by powerlines while it was still in the initial attack phase.

Holiday Farm Fire
Holiday Farm Fire — Oregon Daily Emerald photo

“It wasn’t until the end of last year that we discovered new evidence that pointed to Bonneville Power Administration sparking a second fire,” said Alex Robertson, one of the four attorneys for the plaintiffs. He said that second fire merged with the Holiday Farm Fire. BPA provided power to EWEB and Lane Electric, and failed to power down its lines in a public safety shutoff. On Labor Day a danger tree fell onto a BPA line on Highway 126 and ignited another fire about 4 miles away.

This is the evidence that caused the law firms to bring BPA on as a co-defendant for the suit filed as a federal case — BPA is a federal agency, so unlike previous cases in county circuit court, this suit will be heard in federal court. The earlier case filed against Lane Electric and EWEB was dismissed to combine with the suit against the BPA.

[MORE DETAILS HERE]

Robertson said that on the same day the new lawsuit was filed, January 16, another suit was filed by 60 insurance companies seeking reimbursement of claims already paid to homeowners.

The Forest Service and Inciweb have wiped most of the records of the fire from their websites, but a BAER summary [PDF] of the Holiday Farm Fire is still available online.

Another $85 million on PacifiCorp’s liability tab

PacifiCorp will pay another $85 million to nine more victims of the 2020 Labor Day fires, after a jury in Multnomah County on Tuesday recorded the latest verdict in a series of lawsuits that means billions of dollars in liability costs for the Portland-based utility company, according to an AP report.

“PacifiCorp has settled and will continue to settle all reasonable claims for actual damages under Oregon law,” the utility said. The western Oregon fires were among the worst in the state’s history, killing nine people, burning 1.2 million acres, and destroying upward of 5,000 homes and other structures. Though the extreme fires were not unprecedented, the Labor Day fires burned more of the Oregon Cascades than had burned in the previous 36 years combined.

one of the exhibits at PacifiCorp trial
From one of the exhibits at trial establishing PacifiCorp’s liability

A jury in June found PacifiCorp liable for negligence in its failure to de-energize powerlines for its 600,000 customers — after the utility was warned by fire officials and emergency managers that its powerlines had started multiple fires and that there was an emergency need to cut power in at-risk areas because of the extreme fire danger.

Plaintiffs were awarded $71 million in that case.

PacifiCorp agreed last month to pay $299 million to settle a lawsuit by 463 plaintiffs who lost homes and other property in southern Oregon wildfires in September 2020. That jury awarded around $90 million to 17 homeowners. The award on Tuesday was the first of cases brought by plaintiffs in the broader class-action suit. More trials are set for February and April.

2020 Labor Day fires in western Oregon
Labor Day weekend fires in 2020 in western Oregon

911 calls: the stranded and missing in Maui’s wildfires

“The flames came back … they’re in the trees and the grass.”

“We slept on the street.”

“We’re dying out here.”

The Associated Press has compiled numerous 911 calls from the barrage that Maui operators received the day after wildfires swept through Lahaina. The operator answers were the same each time; emergency responders weren’t able to help find missing people because they were still trying to get people to safety, still working hotspots and responding to fires.

Maui fires, NASA image
Maui fires, NASA image

The 911 recordings from the morning and early afternoon of August 9, according to the Honolulu Star-Advertiser, were the third batch of calls released by the Maui Police Department in response to a public records request. The recordings demonstrate that dispatchers and first responders were limited by diminished staffing and communications failures.

Some callers ask where their family members are, some report disastrous fire damage, and others plead with dispatch  to tell them where to go to be safe. People were trapped in their homes or hotel rooms, many with no food or water. With each desperate call, operators had relatively the same response: they had no answers.

Read the full story here.

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FEMA director resigns after fire fund failure

Longtime federal agency official Angela Gladwell has “overseen” the $4 billion compensation fund that was supposed to pay victims of a disastrous 2022 New Mexico wildfire accidentally started by the Forest Service. Her resignation follows resounding criticism of FEMA’s handling of payments that were funded and due residents for damages caused by the Hermit’s Peak / Calf Canyon Fire, which destroyed over 400 homes and racked up literally billions of dollars in suppression costs and damages.

Angela Gladwell’s actually being “reassigned,” because the Federal Emergency Management Agency is “restructuring” its disaster response in New Mexico — in part because of loud and long criticism of its handling of disaster aid and damage payments — which Source New Mexico and ProPublica have followed for the past year.

A year after the fire, the FEMA claims office had paid less than 1 percent of its total funding allocated.

In a news release announcing Gladwell’s departure, Deborah Martinez with the claims office said she “successfully built a compensation program from the ground, assembling a team of locally hired staff with knowledge of New Mexico and the communities affected by the wildfires.” Martinez said Gladwell will now “transition to a new role” as FEMA consolidates recovery programs in the state. She would not, however, answer questions about what that “consolidation” might entail.