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.

Report: CAL FIRE prevented insurance company fire engines from accessing customers’ homes during Woolsey Fire

Satellite photo smoke Woolsey Fire
Satellite photo showing smoke from the Woolsey Fire at 10:42 a.m. PST November 9, 2018. Click to enlarge.

For the last 12 years we have been aware of insurance companies sending fire engines to protect high-valued homes covered by their policies when a wildfire approaches. Companies such as Chubb figure keeping a multi-million dollar home from burning is less expensive than paying to rebuild it, so they contract with Wildfire Defense and other companies to send firefighters to their customers properties when smoke is in the air.

The tricky part is intermixing the private crews with the existing incident management organization. Some jurisdictions view the insurance company crews as personnel that need to be protected, rather than fellow firefighters engaged in the fire fight. This became very evident during the Woolsey Fire in November when CAL FIRE prohibited the private engine crews from accessing their customers’ homes, including mansions in Malibu, California.

Below is an excerpt from the Malibu Times:

…While benefits seem obvious for insurance companies, statewide fire officials point out they complicate firefighting efforts for central command, since they cannot communicate readily with rank-and-file crews. Now, in the fallout of the Woolsey Fire—where resources were spread so thin many homes did not see any fire engines at all—questions are being asked about why private crews were turned away.

Malibu resident Ron Krisel, who is insured by USAA (only available to active, retired and honorably discharged members of the U.S. military), was eligible for the services of a private firefighting crew. However, he was notified by USAA that when their crew checked in with the joint command for the Woolsey Fire, they were told by CAL FIRE that they would not be allowed to come into Malibu and, something to the effect that, if they disobeyed, they would never be allowed in during a fire from now on.

Krisel’s house burned down the day after the fire came through—a casualty of still-blowing embers. He feels strongly that if the private crew contracted by USAA had been allowed to come in, his house would’ve been saved—they would’ve kept an eye on the burning embers and hot spots and put them out before the house caught fire. County firefighters never showed up.

When The Malibu Times contacted Scott McLean, public information officer for CAL FIRE Woolsey Fire, to ask why, he said he wasn’t familiar with this particular incident, and would only be able to talk about their policy in general.

McLean verified that private fire companies must check in with the authorities at the joint command to show documentation from the insurance company and the address of the specific house.

“It’s a common thing—no big deal. We rarely turn them away,” McLean said. “But if there’s an evacuation order for the area the house is in, they cannot come in.” That’s the most obvious reason why the crew coming to Krisel’s house was turned away—the Malibu evacuation order must have already been in effect.

Our opinion:

Private engine crews can be helpful in keeping certain high-value structures from burning during a rapidly spreading wildfire when there are not enough government resources to protect every home. However, if they have no communication with the incident management organization which does not have any knowledge of their location, mission, or capabilities, it can throw a monkey wrench into an already chaotic situation.

CAL FIRE, the U.S. Forest Service, and the other large organizations involved in wildfire suppression need to sit down with the insurance companies and agree on some standard operating procedures. The Incident Management Team needs to know what the private crews are doing and where, and the private crews need to have direct communication with the Team.

One day, when all firefighting resources are carrying equipment that makes it possible to track their location, this will become much easier — and safer. The federal and state agencies need to get off their butts and implement these tracking systems.

News roundup, November 15, 2017

Some home insurance companies refusing to renew policies in wildfire-prone areas

Firewise defensible space structure

One of the most serious problems facing firefighters today is the movement of residents into the Wildland/Urban Interface, the WUI. As a wildfire spreads toward flammable structures that are near or in some cases surrounded by burnable vegetation it can be very difficult to protect them. Often as a fire grows in a WUI area containing dozens or hundreds of homes there are not enough firefighters to park a fire engine at every house.

Some structures are easier to protect than others. “Firewise” refers to homes that are designed and maintained to be fire resistant. A few burning embers (that can be transported in the wind for a mile) in most cases will not ignite a home built to withstand fire. It is the other homes, with flammable siding, roofs, and decks, and that have brush or trees providing an efficient path for the fire to spread up to the structure, that is a nightmare for the fire department. In some cases as a fire approaches, this second category of homes will be written off since it may not be possible to save them, even with a fire truck parked in the driveway. Without vegetation clearance of 30 to 100 feet, it can be unsafe for firefighters to remain at the site as an intense fire approaches.

Gunbarrel Fire
Firefighters at the Gunbarrel Fire west of Cody, WY apply foam and install sprinklers at Goff Creek Lodge, August 26, 2008. Photo by Michael Johnson.

A difficult to defend home is not only a problem for the owner, but it also affects the community. As it burns in a wildfire, it creates huge amounts of radiant and convective heat. Combined with the airborne burning embers put into the air as it burns, it can ignite other homes nearby. If multiple unprepared homes burn, the effects of the conflagration are multiplied making it difficult for even Firewise structures to survive. In addition, unprepared homes suck up more firefighting resources, which can make it difficult or impossible for there to be enough firefighters, crews, engines, and aircraft to suppress the wildland fire — they are often tied up because of some irresponsible residents.

In a perfect world all structures in a WUI would be Firewise. Inevitably, however, a sizeable percentage of homeowners will do nothing to make their structures defensible. There are two ways to encourage, or even force, them to take action before a fire strikes. Zoning laws and insurance companies. Laws can, for example, ban wood shingle roofs, and require vegetation clearances up to 100 feet, as well as other requirements. Many jurisdictions do this.

Insurance companies have an extremely powerful tool at their disposal that is rarely used. According to the NW News Network, at least two companies in Washington and Oregon are refusing to renew the policies for some home owners, or for structures in wildfire prone areas.

Below is an excerpt from NW News:

Some insurance companies are choosing not to renew policies in wildfire-prone areas of the inland Northwest. That’s sending home owners scrambling to find new coverage for their properties. Northwest-based insurers such as Pemco and Grange Insurance are getting choosier about how much risk they’ll take on. This according to property owners who’ve been dropped recently and posted about their frustrations online.

One customer from Chelan, Washington, complained Pemco refused to renew her homeowners insurance despite 17 years with no claims. The common thread among the non-renewals is location in wildfire country.

Oregon’s insurance regulators looked into this and said some insurers updated their wildfire risk rating models.

“There have been some non-renewals, rate increases, and moratoriums on new business, because updated risk models showed certain areas to be at especially high risk of wildfires,” wrote Jake Sunderland, a Department of Consumer and Business Services spokesman, in an email.

Refusing to write policies in a large area is not the best solution. Some companies will only insure structures after inspecting them to be sure they are Firewise and have defensible space.

Prescribed fire liability standards of care

Above: Pleasant Valley Prescribed fire in South Dakota, March 10, 2016. Photo by Bill Gabbert.

Exposure to liability worries many land managers when they are considering using prescribed fire as a management tool. Knowledge of the facts is one of the first steps toward lessening that concern.

Carissa Wonkka of the University of Nebraska-Lincoln has written an article for the Great Plains Fire Science Exchange that discusses fire liability and standards of care. You can read the entire article here. Below is a very brief excerpt.

…In the United States, state open burning statutes define the standard of care owed to the public by burners. In a lawsuit, a burner will be found liable for damages resulting from their fire or smoke if they have not met the standard of care prescribed by their state statute. If a state has not developed a statute specifically related to open burning or prescribed burning, judges will apply the standard of care established by previous prescribed burning cases in their state. Three different standards of care have emerged for prescribed fire practitioners: strict liability, simple negligence, and gross negligence.

Strict liability is the most stringent standard of care for those using prescribed fire, with only five states (Hawaii, Delaware, Rhode Island, Minnesota, and Wisconsin) applying this standard in prescribed fire civil cases. Under a strict liability standard, a court would hold burners liable for any property damage caused by an escaped prescribed fire, regardless of the action of the burner. This standard is more often established through case law, not explicitly stated in the statute. Some states have language that suggests strict liability will apply even though the statute does not expressly state this. Hawaii, for example, makes escape of fire beyond the established burn perimeter evidence that, if uncontested, is sufficient to prove willfulness, malice, or negligence. This means that a plaintiff in a case against a burner could win a lawsuit simply by showing that the ϐire escaped. The burden of proof would fall on the defendant to prove they were not negligent in the events leading up to the escape that caused the damages…

Standard Of Care

For more information on burning regulations by state: KS, MO, MT, ND, NE, OK, SD, TX, WY. The Great Plains Fire Science Exchange has more fire science resources at http://www.GPFireScience.org.

Oregon’s fire insurance did not kick in this year

DC-10 Canyon Creek Fire
A DC-10 working the Canyon Creek Fire in Oregon drops in Pine Creek Drainage, August 26, 2015. Photo by Tracy Weaver, NPS.

The fire insurance policy that the state of Oregon purchased from Lloyd’s of London did not kick in this year since the net expenses of suppressing state-responsibility wildfires did not exceed the $50 policy deductible. If it had, their additional costs could have been covered up to $25 million. Premiums for this coverage were split between state and private timberland owners, who agreed to pay $3.75 million into the policy.

Below is an excerpt from an article in the La Grande Observer:

…As of Oct. 19, the ODF had recorded 1,001 fires, 73 more than their 10-year average, according to a letter from [Oregon Department of Forestry State Forester Doug] Decker sent to the co-chairs of the Oregon Joint Committee on Ways and Means last month. Those fires burned 91,487 acres of ODF-protected land, 63,948 acres more than the 10-year average.

The Forestry Department estimates that its large-fire costs for this season sit at $76.7 million, compared to the 10-year average of $22.3 million, Decker wrote in the letter.

Decker said about $19.5 million will be reimbursed by FEMA’s grant program. Another $25.5 million is expected to be recovered from other partners. Still, the ODF is requesting more than $19.5 million of general fund dollars to cover the state’s portion of large-fire costs, according to the letter.