Forum - Insurance and Jurisdictional Regulations

Insurance Solutions?

During 20 years of involvement in the national wildland/urban interface program, I've received some intriguing (and unsolicited) ideas from all over about how the interface problem can best be solved. "Solutions" like giant sprinkler systems in the interior forests of Montana and Idaho that will put out the fires with salt water pumped from the ocean and fire apparatus equipped with jet engines that will blow the fire away from homes, thus preventing the disasters that we too often have seen in the past. (Sounds like fun, as long as the brakes hold.)

Every now and then, someone will even suggest that insurance companies decrease the premiums for homeowners who do the Firewise thing around their homes and (better yet) increase the premiums for those who don't. This idea of telling thousands of private companies how much to charge for their products seems to be a constant source of fascination for many people. Here's a short list of why this "solution" is not feasible.

1. The numbers and frequency of losses are not big enough to provide valid data for analysis, especially in large areas in which many properties are insured by many companies.

2. Your state insurance commission approves changes in products and rates for each insurance company that they license. Changing rates or products is an average 36-month process whose expenses may not be worth the effort for the company seeking changes.

3. Even if premium reduction seemed significant enough to encourage the homeowner to, for example, install a new fire rated roof, the increased value of the home would result in increased local property taxes which could exceed any premium reduction.

4. Property insurance is based on replacement values of the home (or its parts), and the premiums might actually increase to cover more expensive building materials (e.g., a new roof).

Most people make way too many assumptions about insurance because they don't take time to understand what they're buying. Here's an example: if you have flood insurance, will the furniture in your basement playroom be covered in case of flood? Do you know or are you assuming?

There are many more aspects of insurance to consider but the bottom line is that understanding and applying Firewise mitigation on private property is the responsibility of the property owner -- not to save a few dollars but to help protect their investment from loss.

Want more information? Come to the WUI Conference in Denver.....

By Jim Smalley, Firewise Communities Program Manager

Backyard Fireworks Are Not Firewise

The personal and wise respect of fire and its energy has always been central to the Firewise message. The recognition and acceptance of personal responsibility in preparing homes from ignition by approaching wildfires began a decade and half ago in the introduction of Firewise Landscaping. Now that July 4th (Independence Day) is upon us, I hope everyone will play it safe when it comes to fireworks. Fireworks are exciting to watch but they can be extremely dangerous to touch and play with. Each year, thousands of kids get hurt by fireworks. Pre-teens and teenagers face the highest risk of fireworks injuries. A majority of people injured by fireworks are under the age of 20, with many of the injuries incurred by those under age 15. The highest injury rate relative to population was for ages 5 to 9, with 8.9 times the risk for the entire population.

As a former fire chief, I have seen the bodily harm and property damage that the un-Firewise use of explosives can cause. Yes, fireworks are explosives and should be treated as carefully as dynamite. Okay, maybe most are not THAT explosive, but the result can be just as serious. In 2003, over 9,000 people were treated at hospital emergency rooms for fireworks-related injuries. Burns were the leading type of fireworks injury (NFPA). Contusions and lacerations were second (18%), and were equal in share to burns when the injury was to any part of the head or face, including the eye. Hands or fingers were the part of the body injured in 26% of the incidents. In 20% of the cases, the eye was involved, and other parts of the face or head accounted for 17% of the injuries.

Even sparklers, which are fun for kids to watch and wave around, still cause burns after they've burned out. In 2004, hospitals treated 9,600 people nationwide for fireworks-related injuries. Eighty-five percent of fireworks injuries, the NFPA reports, are caused by legal fireworks. Of those people injured in 2004, a U.S. Consumer Product Safety Commission report said, eight died from their injuries. They ranged from five to 80 years old.

And it's not just personal injury and harm that results. In 2002, an estimated 3,000 reported structure or vehicle fires were started by fireworks. Although these resulted in no deaths, 60 injuries and $29 million in direct property damage were reported.

Finally, fireworks are a significant cause of forest fires during this period each year. Restricted fireworks are much more likely to cause a forest fire or injury because of their erratic and unpredictable behavior. Since many of the restricted fireworks are tossed or airborne, often the wildfire ignition can be well away from the site where the fireworks are being used. For this reason and all those cited above, more and more states and counties are banning the sales and restricting the use of consumer fireworks.

Why wait till you or a family member is harmed or you are held liable for the cost of forest fire suppression? Work with your community leaders to ban consumer fireworks in your area. Have fun, but watch the fireworks at community events and be Firewise this Fourth.

posted by Jim Smalley Manager, Wildland Fire Protection NFPA at 6/30/2006 11:08:00 AM

Insurance Can Only Do So Much

How often do any of us read through our homeowner's or renter's insurance policy? Do we know if our homes are insured to full replacement cost? Are we covered if someone slips and falls in our driveway? And what about wildfire? If fire destroys our homes or possessions, we'll get our claim settled and rebuild and be back to normal in no time, right?

More usually, we don't think about insurance or the possible loss of our property until a disaster strikes. Most people don't enjoy dwelling on such possibilities. We tend to discount the likelihood that such things could happen to us, in spite of statistics and known risks. And in the case of wildfire, it seems like such a huge and unpredictable phenomenon that we sometimes feel there is nothing we can do.

Having insurance coverage not only provides peace of mind, but can also prevent personal financial disasters. The Insurance Information Institute has excellent information for individuals about how to make sure they have the coverage they need. In the Rocky Mountains, the regional insurance information service has specific advice about wildfire, not only regarding insurance coverage, but also on mitigation actions that property owners can take to reduce the likelihood that their home will ignite and become another claim on the books. Yes, the insurance educators are promoting Firewise concepts.

Why is that? After all, insurance premiums just seem to rise every year no matter what we do. No one is promising discounts if homeowners clean their gutters or trim back limbs or sweep pine needles off the porch. But insurers are interested in what they call "loss control", meaning that the responsibility is on the policy holder to do the basic maintenance, upkeep and repair of the property so that it doesn't pose a high risk. They have recognized that Firewise concepts based on research about the home ignition zone make sense for property owners to apply, just the same way that simple security measures like locking one's doors to reduce the likelihood of theft make sense. Insurance can provide financial support for replacing a building and its contents, but it can't prevent fire from igniting your home and destroying personal items such as photo albums and keepsakes. Loss control in the form of applied Firewise concepts can give you a much greater chance to avoid becoming a claims statistic.

posted by Michele Steinberg at 5/21/2006 02:30:00 PM