Mike Kreidler: Wildfire mitigation work can keep people safe and our insurance market healthy

By Mike Kreidler

The Gray and Oregon Road fires this summer burned over 10,000 acres apiece, destroyed 400 homes and, tragically, resulted in the loss of two lives.

We sent staff to the Spokane area after the Gray and Oregon Road fires to provide aid at the Spokane County Disaster Assistance Center.

They fielded questions from people impacted by the fires about their insurance coverage. Many of the residents seeking assistance owned manufactured homes, and around 75% of the people they spoke with were uninsured or substantially underinsured.

Insurance is now on many peoples’ minds after these recent fires. We’ve been reminding homeowners to regularly check their coverage or contact their agent or broker if they make home improvements and answering questions about home insurance and wildfire threats.

At the same time, people are questioning if our insurance market is facing the same issues plaguing California – and if so, what is our office prepared to do about it?

State Farm and Allstate, two of the largest homeowners insurance companies in the country, announced in May and June that they will no longer accept new applications for homeowners policies in California. Three other major players modified what they deem an acceptable risk. Wildfire risk was one of the main factors and Californians suffer from more wildfires and wildfire-based property damage than the residents of any other state.

While there have been instances of homeowners’ policies not being renewed in areas with a higher risk of wildfire, it’s not the norm and guardrails are in place. More than 120 companies in Washington are writing home insurance policies. Our state also offers insurance through the Fair Access to Insurance Requirements Plan, which insures folks who can’t find coverage anywhere else.

The FAIR Plan is also a litmus test for the availability of coverage through the private market. Currently, about 100 people, statewide, use the FAIR program.

To put that into context: California’s FAIR Plan grew from 127,000 policies in 2018 to 273,000 last year. In Florida, where climate change and frequent litigation have prompted several major companies to pull out altogether, Citizens Property Insurance Corp. (the Sunshine State’s FAIR Plan) is now the state’s largest insurer at 1.4 million policies.

To keep our private home insurance market healthy, we’ll need to be proactive and work on mitigation efforts at different levels. If individuals, communities, and the state work together to reduce the frequency and severity of property damage associated with wildland fires, it will create a more acceptable? risk for insurance companies.

Individually, homeowners should engage in sensible property management – like clearing roofs and gutters, removing flammable materials from wall exteriors, and installing mesh screening to keep out embers. The Insurance Institute for Business & Home Safety is developing the best science available to protect your home from wildfire risk. Additionally, the National Fire Protection Association has a Firewise program (www.firewise.org) with guidelines on building protection zones around your home, and how to prepare for wildfire threats.

At the local level, the state Department of Natural Resources recommends creating a Community Wildfire Protection Plan. A CWPP identifies and prioritizes areas for hazardous fuel reduction treatments and makes recommendations on how to reduce structural ignitability – essentially, a plan that lays out how to make large-scale fires less likely to spread. It can also cover wildfire response and hazard mitigation, along with community preparedness and structure protection. Communities in 26 counties across our state have developed a CWPP since 2005.

Building codes that require certain fire resistance measures – like exterior construction materials in designated fire hazard severity zones – have been shown to increase a home’s chance of surviving a wildfire. Washington’s Wildlife-Urban Interface code includes requirements for fire-resistant construction materials and defensible spaces around the home to reduce vegetation that could potentially fuel a fire.

Some communities should consider what Paradise, California, has done as they recover from the 2018 Camp Fire: Accept the Insurance Institute for Business and Home Safety standards into their city ordinances to create a more resilient community.

Additionally, the Cascading Impacts of Wildfire bill was passed this legislative session to expand the Wildfire Ready Neighbors program from Eastern Washington into Western Washington. Since 2021, it’s helped more than 4,000 residents in Eastern Washington better prepare their homes and communities against the threat of wildfires.

We also need to adapt to the changing – and correlated – realities of the insurance market.

As your insurance commissioner, I work hard to make sure our insurance rates stay reasonable and insurance companies treat policyholders fairly. As a result, we enjoy a robust insurance market in Washington.

But if we don’t work to protect the insurability of homes encroaching on timber and grass lands, and thus in the path of any potential wildfires, the dangers of fire move into a new realm. That’s what our friends in the Golden State are seeing now.

Mike Kreidler was elected Washington state Insurance Commissioner in 2000 and was re-elected to a sixth term in 2020. He currently vice-chairs the National Association of Insurance Commissioners’ Climate Risk and Resilience Executive Task Force, which coordinates the group’s work on climate risk issues.