California bans insurers from dropping policies in wildfire areas

It will apply for one year after the Governor declared a state of emergency

Glen Cove Fire
Glen Cove Fire south of south of Vallejo, California, northeast of the I-80 Carquinez Bridge, October 27, 2019. Photo by @arrowstewtoe.

The California Department of Insurance is invoking a law passed in 2018 that bans insurance companies from dropping or refusing to renew homeowners policies in zip codes within or adjacent to the perimeters of recent fires. This will apply for one year after the Governor declared a state of emergency in October, 2018 and will affect at least 800,000 homes in wildfire disaster areas in Northern and Southern California. The action by Insurance Commissioner Ricardo Lara is the result of Senate Bill 824 that he authored last year while serving as state senator.

In his announcement about the localized ban, the Commissioner went a step further and called on insurance companies to voluntarily cease all non-renewals related to wildfire risk statewide until December 5, 2020.

Many homeowners in California are finding that the premiums on their policies have doubled or tripled in the last two years, and insurance companies in some cases are canceling or refusing to renew policies on residences in areas where wildfires have occurred. California’s property insurers are beginning to retreat from areas they identify as having higher wildfire risk.

Local governments are concerned that this trend could disrupt local real estate markets and cause property values to decline, reducing tax revenue available for vital services to residents such as fire protection, community fire mitigation, law enforcement, road repairs, and hospitals.

The California Department of Insurance has identified some of the zip codes affected by the temporary ban on dropping or refusing to renew homeowners policies. The following fires with the affected zip codes are listed: Saddleridge, Eagle, Kincade, Tick, Getty, Hill, and Maria.

CAL FIRE has not yet provided the fire perimeter maps for the Water, 46, Hillside, Easy, Sky, and Glen Cove Fires, therefore the zip codes near these fires is not yet available.


Opinion: Could this be a tipping point?

I have wondered for years when the insurance companies were going to drastically raise their rates or refuse to issue policies in wildfire-prone areas. I figured that when it occurred it could be a tipping point that could lead to broad positive actions affecting the resiliency of communities at risk from wildfires. Either that, or those areas could experience significant outward migration of residents, causing economic disruption.

Fire-prone communities, if they are going to survive over the long term, have to learn to live with fire. Sticking their heads in the sand and thinking fires can’t happen to them is not recognizing reality.

Earlier this year I wrote an article about “Five things that need to be done to protect fire-prone communities”. In areas where they are adopted insurance companies could recognize that homes would be less likely burn in a wildfire and adjust their rates accordingly.

Here are the broad areas that need to be considered:

  1. Home spacing and lot size
  2. Envelope of  the structure itself
  3. Home ignition zone
  4. Community infrastructure and planning
  5. Wildland-urban interface

The only effective way to ensure that residents understand and implement these five tasks is to make them mandatory by establishing Fire Codes at the local and state levels.

After the Tubbs Fire, homes in California town are being rebuilt without strong building codes

Above: Homes being rebuilt in the Coffey Park area of Santa Rosa. Screenshot from Sacramento Bee video.

In Santa Rosa, California the 1,200 homes that were destroyed in the 2017 Tubbs Fire are being rebuilt without a requirement that they adhere to the stricter building codes required in rural areas of California that would make them more resistant to being consumed in the next wildfire.

From the Sacramento Bee:

…Coffey Park [neighborhood] is rebuilding quickly: The community organization Coffey Strong says more than half of the 1,200 homes that burned down in 2017 are finished, and hundreds more are under construction.

But some wildfire experts wonder if Coffey Park isn’t courting danger by ignoring a state building code designed for wildfire-prone areas.

“They’re setting themselves up for the next disaster,” said Chris Dicus, a wildfire expert at Cal Poly San Luis Obispo. “I was disappointed to see they didn’t build up to code.”

Coffey Park residents seem resigned to the risk of another fire. They consider it part of the cost of living in a neighborhood they love. When asked about building codes, they say yes, another monster like the Tubbs Fire would be devastating — but no amount of fire-resistant roofing would likely change that.

“If it’s going to burn down, it’s going to burn down,” said Charlie Catlett, a retired physician who moved back home a little more than a week ago, after the latest evacuations were over.

Chapter 7A of the California Building Code designed for the state’s areas at high risk from wildfire can be optionally adopted by cities, but is mandatory in rural areas designated by CAL FIRE as being at high risk of wildfires. It lays out standards for roofs, exterior walls, vents in exterior walls and attics, windows, exterior doors, decking, and outbuildings.

Analysts studying the aftermath of the Camp Fire which destroyed much of Paradise, California found that homes built to fire-safe standards had a much higher survival rate than those that were not. Beginning in 2008 new construction in the city was required to follow Chapter 7A. Fifty-one percent of the homes built under that standard survived, while only eighteen percent built before 2008 did.

Headwaters Economics found that the cost of building a fire-resistant home is about the same as a standard home.

Adopting sensible building codes is very important, but a holistic approach is required to keep from repeating wildfire disasters:

  1. Home spacing/ lot size
  2. Envelope of the structure itself
  3. Home ignition zone
  4. Community infrastructure and planning
  5. Wildland-urban interface

In April, 2019, we covered these five categories in more detail.

Proposal for Major Wildfire Action Plan in California

Photo by Jeff Zimmerman
Tubbs Fire, October, 2017. Photo by Jeff Zimmerman.

Retired Fire Chief John Hawkins has written what he calls a “Major Wildfire Action Plan” for the state of California. The Chief describes the document as “comprehensive and broadly addresses the wildfire problem via the four accepted phases of emergency management: Prevention, Response, Recovery, and Mitigation.”

The catastrophic fires of 2017 and 2018 in California are evidence that something needs to change. Maybe this four-page document will help move the conversation along.

Hundreds of small communities face a greater risk from wildfire than Paradise, California

Camp Fire drone photo
Photo taken on the Camp Fire by a drone in Magalia near Indian Drive.

Pamela Ren Larson and Dennis Wagner of the Arizona Republic studied nearly 5,000 small communities around the West to find out how how many of them are facing large-scale wildfire risk similar to Paradise, California where 19,000 structures burned and 85 people were killed in the Camp Fire. After finding 526 places that have a higher wildfire potential than Paradise, nine reporters set out to report on nine communities in eight states.

Click on the tweet below to reveal the detailed thread which is an introduction to the very detailed reporting that you will see when you click on the links therein. Here is a link to the main story.

The home ignition problem

“We don’t have a forest fire problem, we have a home ignition problem. As soon as you come to that realization, it changes your view on wildfire.”

Silverthorne, Colorado 2018 Buffalo Mountain Fire
Fuel breaks at Silverthorne, Colorado during the 2018 Buffalo Mountain Fire. USFS.

Below is an excerpt from an article at the Montana Free Press:

BOZEMAN — Ray Rasker, who has researched wildfire for more than a decade as the executive director of Bozeman-based nonprofit Headwaters Economics, makes a bold claim about wildfire and its human impacts.

“We don’t have a forest fire problem, we have a home ignition problem,” he said. “As soon as you come to that realization, it changes your view on wildfire.”

(UPDATE: Ray Rasker contacted us in a comment, below, to say,  “The top quote [above] was something I mentioned to the reporter as something that was said by Dr. Jack Cohen, a long-time Fire Science Researcher with the U.S. Forest Service. It’s not my quote and I’m not trying to take credit for Jack’s insightful comment.”)

Often we hear about the costs of suppressing wildfires, but the cost of fire trucks, firefighters, dozers, and aircraft are only part of that cost.

Another excerpt:

Some of a community’s willingness to change growth policies, subdivision regulations, building codes, and the like can be attributed to economics. Although significant, the money spent putting out a wildfire is minor — about 9 percent — relative to fire’s total financial impact, Rasker said. “Fifty percent of the cost is borne by the community. That’s businesses that close, that’s the loss of tax revenue during the fire, that’s the cost of reconstruction — restoring your wetland, for example. Your tax base goes up in flames.”

When economic losses become severe enough, elected officials find the political cover they need to push for additional regulation. Rasker said he’s seen the dynamic at work in several communities CPAW has worked with, including Flagstaff, Arizona; Boulder, Colorado; and San Diego, California. “Now it’s not planning as a liberal agenda; now it suddenly becomes something that’s fiscally responsible.”

Such regulations can include mandating better egress roads to make subdivision evacuations safer, requiring new buildings to be constructed with fire-resistant material, and developing landscaping guidelines for homeowners. There was a time, Rasker said, when municipal fire codes mandating safety measures like sprinkler systems and marked fire exits were all but nonexistent, resulting in casualties. “In an urban environment, we’ve fixed this problem,” he said. “But when the houses are surrounded by trees on the outside of town, suddenly none of those rules apply,” Rasker said, referencing a lack of regulations and enforcement in many rural areas.