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How New Wildland Fires Scores Affect Homeowner Premiums and Insurance Eligibility
Properties located fire prone areas in Washington, (all of Eastern Washington but especially in Chelan, Kittitas, Okanogan, Yakima Counties) can expect to get a big increase in the number of policies being non-renewed, and IF renewed, very significant additional premiums increases from where rates were in 2023 due to new wildland fires scoring all carriers are implementing after many 10's of BILLIONS in wildfire claims in the last 15 years. There are over 160,000 homes in WA at high or extreme fire danger and over 16,000 such homes just in Chelan county; even inside city limits like, Leavenworth and Wenatchee are affected.
New rates approved by insurance commissioners due to new state data on wildland fires that takes into account slope, fuels from a satellite image for each property location and distance to any previously know fire perimeter, are taking effect. Virtually all preferred carriers are bailing entirely after looking at this data, and those that have not bailed yet will very likely be doing so soon. This is an absolutely huge recalculation of wildfire risk; the biggest change to fire insurance rating since forever.
This data is being compiled by 3rd party vendors that insurance companies are starting to use this data to give a Wildfire score for each specific property. After many years of multiple billions of dollars in wildfire claims, the industry needed to get better wildfire risk data. These vendors look at slope, fuels, distance to wildland, and distance to historical fire paths to determine a wildfire score. The top 20% riskiest properties account for 98% of wildfires in the US.
If the wildland fire score is too high for your specific property, carriers are now saying that a new preferred policy is ineligible and many are also saying that particular property is ineligible for an existing preferred policy to be retained. Expect this trend to continue as carriers try to reduce their financial exposure to catastrophic wildland fires, Example: State Farm announced in April, 2024 that they were going to non-renew over 70,000 properties in CA, representing their top 2% riskiest properties. This trend will all carriers has extended to WA. See the methodology here:
https://firststreet.org/methodology/fire?from=riskfactor.com
There are other options available in many cases but not necessarily every case. The unregulated, excess and surplus lines insurance markets have traditionally offered coverage for these more remote properties but now due to the shear volume of properties, mostly from California, needing to get coverage in these surplus markets, all, these surplus markets are also doing these wildfire scores for each property and rating accordingly.
These surplus lines markets have additional fees and taxes, in most cases more limited coverage, and significantly higher premiums; often 2 to 4 times as much or more. (We have almost two decades of experience writing in surplus lines markets & have developed many underwriting relationships nationwide.)
This could even result in extremely high wildfire risk properties, especially if they are large homes, not being able to get insurance in the unregulated market .
However, even those homes could still be insured with basic coverage (if they are not a secondary home or vacation rental) through the WA State Fair Plan, that is the insurer of last resort but as of April 2024 they will not take any property used as a secondary residence or vacation rental. They will only accept primary residences and long term rentals and if eligible, the coverage is really bare bones. ( As of Oct. 2024, we have not yet had to place any property in the FAIR Plan due to our extensive surplus lines markets which many agencies do not have access to.)
Chelan County in particular ended up being the poster bad boy on an extensive State wildfire risk report that came out fall 2020. On a scale of 100, with 100 being the highest risk of catastrophic wildfire, with billions in potential property losses, Chelan county got a terrible score of 98. Additionally, Chelan county had an 11000 acre fire in July 2021 rip through the pricey Sunnyslope neighborhood on the northern outskirts of Wenatchee, burning grass from Monitor to the Columbia river in just 12 hours. Amazingly, due to skilled fire fighting including airplanes, no homes were lost, though in many cases fire came to the doorstep and there were some smoke damage claims.
By way of comparison, the next highest scoring county in the state's report was Okanogan county with a score of 68, ironically published just days before the Sept 2020 Okanogan catastrophic fire that burned over 320,000 acres, being pushed by winds of 50 mph and covering 60 miles within a matter of hours. The speed of these fires makes it impossible for fire personnel to save much in its path as reinforcements of firefighters, copters and planes don't even have time to arrive before the property damage is already done. Amazingly, few people died.
The soil records show that all of Chelan county, (including all of Wenatchee, Sunnyslope, Chelan, Manson,
Leavenworth, Lake Wenatchee, Plain, Peshastin, Dryden and Cashmere etc,) have had multiple historic fires some of which that burned all the way to the Columbia River. Upon reviewing the data, carriers don't like the odds. Many carriers are non-renewing now based on this data from satellite imagery for specific properties, even if they have hydrants and/or are inside city limits, as hydrants are not much help against a fast moving wildfire. So expect premiums to go up, and go up a lot, based on this new risk analysis,
if your policy is retained. Both my home policies for my Leavenworth home and my home in Monitor, (just 5 miles west of Wenatchee) have doubled. These increases are on top of larger than normal annual increases for inflation of building materials. Rate changes affecting the whole state are on top of those.
Washington State is following in the footsteps of California where already about 27% of properties are already in surplus lines and that number is climbing very rapidly to an expected 40% or more. California is higher risk due to many more days of high winds (Sept, Oct., Nov.), but with the many ridges and canyons and slopes in eastern Washington foothills they certainly gets their share of wind too. Washington state and California both get about 33,000 lighting “cloud to ground” strikes annually.. It is not uncommon at all to have hundreds of ground lightning strikes in one summer storm in Eastern Washington and the numbers of fires started from one storm can easily be in the double digits.
Chelan county on average has 33 wildfires per year 2/3 of which are lighting caused and most of those are in the US Forest Service areas as 70% of the county is government owned. In 1994 292 sq miles burned; over 10% of the entire county in one month. On average, Chelan county typically loses 5 homes a year to wildfires. That number is likely to increase as people have increasingly built in more high risk areas. Even the city of Wenatchee is a significant wildfire risk. “There are 50,000 properties in Chelan County that have some risk of being affected by wildfire over the next 30 years. This represents 100% of all properties in Chelan County. “ - riskfactor.com It is just part of living in paradise.
At InsurePro (and Leavenworth Insurance), we are an experienced independent insurance agency, so we offer a very wide selection of preferred carriers as well as a large number of surplus lines carriers that will take higher risk properties. We also can do a FAIR Plan policy if necessary. Properties of higher value are have more limited markets since the total insured value of the building and personal property and loss of use can easily add up to 1 – 5 million. That is a lot of claim payout for relatively low premium. Some of these policies have to be shared among carriers to spread the risk.
– Eric Kossian, Underwriting Specialist at Leavenworth Insurance (dba InsurePro).
– LeavenworthInsurance.com, InsurePro.info Eric@Inuarepro.info ph 877-548-5488