The Power of Insurance Incentives to Promote Fire Adapted Communities

 "Where wildfire meets homes, the fire suppression response may protect homes but distort the full cost of insuring the homes from wildfires. Waldo Canyon Fire, Colorado Springs, CO, 2012." Credit: USFS

"Where wildfire meets homes, the fire suppression response may protect homes but distort the full cost of insuring the homes from wildfires. Waldo Canyon Fire, Colorado Springs, CO, 2012." Credit: USFS

HWMO is exploring creative ways to motivate people and communities to action. One technique that some states are using is the power of the economic incentives. Check out this article written by a friend of the organization, Mr. Rob Galbraith, Director of Property Underwriting at USAA. We have opened discussions with the Division of Insurance and some companies such as USAA to offer insurance reduction rates for Firewise Communities. 

From the Source:

"I have attended several community meetings — co-presenting with local fire departments to encourage homeowners to take proactive steps to mitigate their exposure to the threat of loss from wildland fire. And the impact of combining intangible benefits (e.g., life safety, avoidance of property and financial loss) with tangible benefits (e.g., discount on homeowners insurance, recognition as a Firewise community through signage) can be a powerful motivator."

"Requirements by insurance carriers for property owners to take steps to mitigate their exposure to property losses from wildland fire can be a powerful motivator — when those requirements adhere to scientifically-based principles. Government entities may have similar levers in the form of citations, fines, fees, tax withholdings, etc. when property owners are not in accordance with local regulations and ordinances, but these generally are not as impactful as an insurance carrier’s refusal to continue coverage.

However, at times the requirements from insurance carriers can be counter-productive as they impose unreasonable or unnecessary burdens on homeowners. For example, a carrier may require 100 feet of clear cutting to create defensible space around the home, but the property line to the adjacent parcel may be within 100 ft. Removing vegetation may also run afoul of local ordinances on the size and types of trees that may be cut down. Finally, these requirements from carriers may not be performed reasonably in the amount of time given and may give the homeowner misleading direction on the prioritization of mitigation actions, namely starting 0-5 feet from the structure and moving outward over time."