Long before wildfires broke out in Los Angeles, leading insurance companies including State Farm and Allstate stopped selling new home-insurance policies in California due to increasing losses.
The Golden State had eight of the 10 costliest wildfires in the country through 2024, according to The Wall Street Journal.
Senior Vice President of Zion’s Insurance Steve Davis has sold home-insurance in the Wasatch Back for decades, and currently serves as a consultant for a large Park City HOA.
On KPCW’s Mountain Money, Davis said recent cutbacks in coverage are largely because insurers are now contracting with companies that use wildfire mapping tools, including historical records and geographic information systems to assess fire risk.
“They’re looking at a variety of different factors that essentially boil down to the risk of wildfire to that one particular home,” Davis said. “What’s interesting is you could have one home that gets declined because of the wildfire mapping, and you could have another home several blocks away that is fine, it maps out okay.”
Davis said wildfire mapping now supersedes other variables that insurers previously relied upon, such as a home’s proximity to a fire hydrant or fire station.
“I believe there is a domino effect, and as I meet with various insurance company representatives, we do see that experiences that they are having in states like California, Colorado primarily, are having an impact on decisions being made here in Utah,” he said. “We’ve seen a dramatic shift in the way that the insurance carriers actually underwrite their policies or make decisions as to whether or not they’ll insure a home.”
Davis said homeowners are increasingly dealing with skyrocketing premiums or having their insurance coverage cancelled.
“We’re really on the verge of a precarious situation in the Wasatch Back, where a lot of carriers have stopped offering coverage for a lot of homeowners, and we’re down to very few who will still offer coverage,” he said.
Utah Gov. Spencer Cox expressed confidence in the state’s home insurance market during his monthly new conference Jan. 16.
“While there are decisions being made again by some carriers about what their pricing will be and what they're willing to cover, so far there still is an ability for Utahns to get coverage, unlike some places in California,” Cox said.
The governor said California’s insurance market is breaking due to bad state policy that limited the ability of companies to raise rates.
“It is true that Californians have been paying lower prices than they otherwise would have paid, and now we see the end result of that - the market can’t keep up, and so many are pulling out of the market,” Cox said. “That’s bad. So something that was meant to help Californians actually ended up hurting them worse on the back end… and as more and more people want to build in areas where wildfire is a danger, they’re going to pay higher premiums. That’s just the nature of this.”
Davis with Zion’s Insurance said one of the primary ways Wasatch Back homeowners can mitigate wildfire risk is to manage the defensible space around their homes.
“Most importantly, you’re going to trim your trees,” Davis said. “You actually want to cut the branches of your pine trees up about six to eight feet off the ground, and you want to clear out any dead trees that have fallen. You want to clear any branches. You want to clear any dead leaves. You really want to get that out of the perimeter of your home out to 100 feet.”
A comprehensive resource guide about wildfire preparation for Park City and Summit County homeowners can be found here.
