Over the past few years, many Summit County homeowners have seen an upswing in their wildfire insurance costs. Some have even lost their coverage completely.
Now, after the latest wildfires in southern California, local homeowners may see their rates rise even higher.
Because insurance companies use risk assessment formulas to calculate coverage decisions, more wildfires across the West means more exposure.
“In the past, homes were rated on a more individual basis. Such as construction materials, vegetation around the house and distance to the nearest fire station,” said Clair Christoffersen, co-owner of C&W Premier Insurance. Recently, however, insurance companies have been relying more and more on modeling software to determine insurance coverage and risk. Some of the most popular of these systems are Redzone, Hazardhub and MaintainX.
“These programs use averages and statistics to rate communities,” explained Christoffersen. “The higher the score, the higher the likelihood of exposure to wildfires. This means individual home factors have become less relevant in risk rating.”
Originally, these scoring systems were designed to help property owners identify their individual risk factors and to take the appropriate steps. However, as national catastrophes increased over the past decade, insurance companies began using these programs to generalize what were considered risky locations.
“The result is an increase in premium rates and a strategic retraction of insurance companies from what are classified as high-risk areas,” Christoffersen said.
The extensive use of these programs to determine risk has created a phenomenon known as “insurance deserts” — regions where insurers significantly reduce their presence or cease offering coverage altogether.
“Some Summit County homeowners have seen their insurance prices double,” Christoffersen said. “And homeowners associations are seeing increases as high as 300%.”
Insurance Commissioner Jon Pike noted that the catastrophic fires in Los Angeles could impact Utah coverage even further.
But there may be some good news for the Park City area, too. While insurance companies are using these generalized software programs to rate areas, many also use a fire rating score provided to fire departments by the Insurance Service Office.
On a scale of 1 to 10 with 1 representing the best, “the Park City Fire Department has an impressive ISO rating of 3,” Park City Fire Marshal Mike Owens said.
“The score reflects how prepared a community and area is for fires, including response time, water system locations and training,” he said.
Unlike California, Summit County wildfires rarely destroy homes. The last time houses burned here was in the 2,000-acre Rockport Fire in August 2013 that destroyed eight homes. The cause was lightning.
State Rep. Casey Snider proposed House Bill 48, which “aims to redefine risk zones, with a state specific mapping system.”
The new map would use data collected by the Utah Division of Forestry where state workers have assessed individual neighborhoods and properties. This more detailed approach is more accurate than national models and would reduce the fire-zone areas. The mapping approach would result in a fairer risk evaluation and possibly reduce insurance premiums for most homeowners.
Currently, around 300,000 Utah residents fall within the national wildland-urban interface — where homes sit in fire-prone zones. With the proposed Utah specific mapping, this number could be reduced to 70,000.
H.B. 48 also encourages residents to implement fire alleviation measures. These include clearing vegetation and shrubbery around your house, using fire-resistant building materials, keeping combustible items a safe distance from your house, and always having a garden hose handy. These extra measures could result in homeowners receiving incentive credits on their insurance.
This could be advantageous in Summit County where individual wildfire mitigation is already common.
“Our community is very good at looking out for one another,” Owens said. “I really want to give recognition and appreciation to our local community. The residents are very fire savvy and diligent about wildfires. The fire department is notified immediately if there is any fire or smoke detected in the area. Plus, the locals are aware of high risk factors and are very respectful about following no-burn alerts and such.”