Think about the unthinkable...then you will be better prepared to financially survive it. Carole Walker, RMIIA
Wildfire is a growing threat in the Rocky Mountain Region, where population is booming in the mountains and foothills. People don't always realize the dangers of living in the Red Zones (dangerous wildfire areas). They move to Colorado, Utah, Wyoming and New Mexico for the breathtaking views, but they don't always see the potential for losing their homes to wildfire. Homeowners need to be aware of the steps they should take to prevent wildfire AND be aware of the insurance impact before moving or building in high-risk areas.
Cost of Wildfire
The most destructive wildfire in Colorado history is the June 2013 Black Forest Fire. Estimated insured losses totaled $420.5 million ($465.5 in 2019 dollars) resulting from approximately 4,173 homeowner and auto insurance claims filed. El Paso County reports 486 structures burned in the blaze.
The 2012 Wildfire Season took a devastating toll on Colorado residents, burning more than 600 homes and personal property. While the rebuilding process continues, damage estimates now total $567.4 million ($636 in 2019 dollars) from insurance claims that include smoke damage, additional living expenses, damaged and destroyed homes, as well as personal belongings and vehicles.
The estimated insured losses make the Waldo Canyon Fire in Colorado Springs Colorado's most expensive wildfire with insurance costs totaling $453.7 million from 6,648 claims ($508 in 2019 dollars). Officials put the number of homes destroyed at 346. The High Park Fire near Fort Collins burned 259 homes, and based on the 1,293 insurance claims filed, the insurance costs are estimated at $113.7 million ($127.4 in 2019 dollars). These estimates do not include commercial losses.
Previously, the most expensive wildfire in Colorado state history was the September 2010 Fourmile Canyon Fire that burned 169 homes and other personal property in the foothills just northwest of Boulder. Damage estimates totaled $217 million ($256 million in 2019 dollars) from insurance claims that included smoke damage, additional living expenses, damaged and destroyed homes, as well as personal belongings and vehicles.
The overall estimated cost of the 2002 Colorado wildfire season including the Iron Mountain, Coal Seam, Missionary Ridge and Hayman Fires was $70.3 million in insured losses ($100.5 million in 2019 dollars). Companies took in about 1,236 claims for the Hayman and Missionary Ridge Fires at an estimated cost of $56.4 million ($80.6 million in 2019 dollars). The insurance industry estimates the Cerro Grande Fire in Los Alamos cost approximately $140 million in insured damage in May 2000 ($209 million in 2019 dollars), making it the most costly wildfire in New Mexico's history.
Nationally, The Camp Fire, the deadliest and costliest wildfire in U.S. history, began on Nov. 8, 2018, killing 85 people and causing $8.47 billion in insured losses in Butte County, California. (Source: California Department of Insurance). The insured loss dollar figure represents the payouts to customers as of May 2019 from the 28,118 auto, residential, and commercial property insurance claims generated from the Camp Fire event. The Insurance Information Institute estimates insurance losses will total $10.5 billion. https://www.insurancejournal.com/news/national/2019/11/06/547719.htm
Previously, the most costly fire in terms of insured losses was the October 1991 Oakland Hills fire which caused $1.7 billion in insured losses (about $3.2 billion in 2019 dollars) and 2003's wildfires in San Diego and San Bernardino Counties, California at $2.03 billion. The 2007 wildfires in Southern California are estimated to have caused $1.3 billion in insured losses. Catastrophic fires account for 1.5% of insurance losses. That compares to 39.1% for tornadoes, 40.8% for hurricanes and tropical storms, 6.2% for terrorism, 6.8% for winter storms, .1% for earthquakes and 5.4% for wind/hail damage (as reported by the Insurance Information Institute).
Wildfire insurance costs hinge on a number of factors, including the number of primary homes in the area (as compared to vacation homes and cabins), their estimated value and the amount of insurance coverage on the properties.
Colorado Wildfire Insurance Costs
Waldo Canyon, Colorado Springs
Black Forest, near Colorado Springs
High Park, near Fort Collins
Fourmile Canyon, northwest of Boulder
Hayman, southwest of Denver
Missionary Ridge, near Durango
Coal Seam, Glenwood Springs
Iron Mountain, near Cañon City
*2019 estimated cost calculations based on the Consumer Price Index.
Top 10 costliest wildland fire in the United States ($ in millions)
Estimated insured loss dollars when occured
Estimated insured loss in 2018 dollars
Nov. 8-25, 2018
Camp Fire, CA
$8.5 - $10.5
$8.5 - $10.5
Oct. 8-20, 2017
Tubbs Fire, CA
$7.5 - $9.5
$7.7 - $9.7
Nov. 8-22, 2018
Wossley Fire, CA
$3 - $5
$3 - $5
Oct. 8-20, 2017
Atlas Fire, CA
$2.5 - $4.5
$2.6 - $4.6
Dec. 4-23, 2017
Thomas Fire, CA
$1.5 - $3.5
$1.53 - $3.6
Oct. 20-21, 1991
Oakland Hills Fire, CA
Oct. 21-24, 2007
Witch Fire, CA
Jul. 23- Aug. 30, 2018
Carr Fire, CA
$1 - $1.5
$1 - $1.5
Oct. 25 - Nov. 4, 2003
Cedar Fire, CA
Oct. 25 - Nov 3, 2003
Old Fire, CA
1Property losses only for catastrophic fires. Effective January 1, 1997, ISO's Property Claim Services (PCS) unit defines catastrophes as events that cause more than $25 million in insured property damage and that affect a significant number of insureds and insurers. From 1982 to 1996, PCS used a $5 million threshold in defining catastrophes. Ranked on dollars when occurred. As of August 8, 2019. 2Adjusted for inflation through 2018 by the Insurance Information Institute using the GDP implicit price deflator. 3Insurance Information Institute estimate based on data from catastrophe risk modelers, reinsurance companies, the California Department of Insurance, and the Property Claims Services unit of Verisk Analytics. These estimates are preliminary because the organizations involved periodically resurvey the events, and the severity of losses and other factors create a high level of uncertainty surrounding the ultimate loss figures. Source: Insurance Information Institute, catastrophe risk modelers, reinsurance companies, the California Department of Insurance, the Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company, and the U.S. Bureau of Economic Analysis.
Check out the Federal Alliance for Safe Homes interactive WildFIRE Wizard tool designed to help those in wildfire prone areas understand how landscaping, terrain and structural features increase or decrease a home's vulnerability during a wildfire. Input details about features including windows, doors, roof, exterior walls and landscaping and create a customized report that includes specific recommendations about how to reduce your home's potential to ignite during a wildfire.
Coloradans overwhelmingly consider wildfire mitigation an important personal responsibility of homeowners who live in high risk wildfire areas, and the majority of Coloradans feel there should be insurance consequences for those who refuse to take steps to protect their property from the threat of wildfire. A January 2015 statewide independent poll commissioned by the Rocky Mountain Insurance Information Association found that 96 percent of Coloradans said it is "very important" or "pretty important" for homeowners to undertake fire mitigation efforts. View complete 2015 poll results here.
How can I help firefighters save my home?
Make it easy for firefighters to get to your home. Roads need to be wide enough to accommodate fire trucks, and there has to be a place for them to turn around. Driveways and bridges must be strong enough to carry heavy emergency vehicles. Identify at least two ways to and from your house and make sure they're well marked. All access routes to your home should be free of low hanging tree branches and cleared of flammable vegetation at least 10 feet from roads and five feet from driveways.
Proximity to a quality fire department is
one of the greatest considerations that
insurance carrier will use in determining
homeowners insurance premium.
Maintain an emergency water supply that meets fire department standards, such as a community water hydrant system, a cooperative emergency storage tank with neighbors, or a minimum storage supply of 2,500 gallons on your property. If your water comes from a well, consider an emergency generator to operate the pump during a power failure. Clearly mark all water sources, and create easy access to your closest emergency water source.
If you have time before you evacuate
your family and pets (your family has an
evacuation plan in place, right?), back your
car into the garage, leave the key in the
ignition, and close the garage door. Close
windows and doors to the house, and
close all inside doors.
Place a ladder against the front of the house.
If you have a combustible roof, wet it down or turn on roof sprinklers.
Turn off the gas at the meter and the butane tank.
Place fire fighting tools, such as 100 feet of pre-connected garden hose, a shovel, a rake, a bucket, and containers filled with water, in an accessible place.
Important personal computer information downloaded to disk
Items with sentimental value, such as wedding dress or baby keepsakes
One week's worth of clothing
Pets with ID tags, carriers, and pet food
What should I do after a wildfire?
Residents evacuated from their homes should contact their insurance agents or companies immediately and let them know where they can be reached. As adjusters are allowed into the burned-out areas they will want to go in with their policyholders to assess the damage. Many companies will set up 24-hour emergency hotlines.
Company claims adjusters, many equipped with laptop computers and portable phones, will start writing checks over the next few days to pay the cost of temporary living expenses for people left homeless by the fires and to begin the rebuilding of damaged homes. Some companies will be opening special claims centers to assist their policyholders. Contact your agent or company if you need additional living expenses while you are out of your home.
Keep receipts. Out of pocket expenses during a mandatory evacuation are reimbursable under most standard homeowner policies.
Be prepared to give your agent or insurance representative a description of your damage Your agent will report the loss immediately to your insurance company or a qualified adjuster who will contact you as soon as possible to inspect the damage. Again, be sure to give your agent a number where you can be reached.
Take photos of the damaged areas These will help with your claims process and will assist the adjuster in the investigation.
Prepare a detailed inventory of all damaged or destroyed personal property. Be sure to make two copies-one for yourself and one for the adjuster. Your list should be as complete as possible, including a description of the items, dates of purchase or approximate age, cost at time of purchase and estimated replacement cost.
Make whatever temporary repairs you can . Cover broken windows, damaged roofs and walls to prevent further destruction. Save receipts for supplies and materials you purchase. Your company will reimburse you for reasonable expenses in making temporary repairs.
Secure a detailed estimate for permanent repairs to your home from a reliable contractor and give it to the adjuster. The estimate should contain the proposed repairs, repair costs and replacement prices.
Serious losses will be given priority . If your home has been destroyed or seriously damaged, your agent will do everything possible to assure that you are given priority.