Local Fire Districts Demand Change in Homeowners Insurance Rating Practices

The increasing frequency of wildfires has raised serious concerns for homeowners residing in high-risk areas, particularly in regions like Washington state. A growing number of residents are reporting that they are being unfairly dropped by insurance companies due to wildfire risk. The KING 5 Investigators have taken a deep dive into this pressing issue, exploring the perspective of local fire districts and the flaws in the current homeowners insurance rating practices.

Real-Life Experiences Amidst Wildfires

In 2021, John Lowe faced a harrowing situation during the Ford Corkscrew Fire near Spokane. Despite hearing an evacuation order, he made the brave decision to remain at his home and confront the wildfire head-on. “When it came up over that ridge over here, it sounded like a tornado coming. A freight train,” Lowe recounted. “It went up and over this house, like a tsunami of fire.” Ultimately, 30 homes were destroyed in the blaze, but thanks to his proactive measures and the efforts of the Stevens County Fire Department, Lowe’s home survived the inferno.

Stevens County Fire Chief Mike Bucy proudly noted that his department has a remarkable track record. “We fought 41 wildland fires this season, no homes burned and that’s the average,” he stated. The department has invested millions in specialized firefighting equipment, including a custom-designed wildfire tender capable of carrying 2,500 gallons of water. Despite these successes, Bucy expressed frustration that such achievements are overlooked by insurance companies. “But none of that gets any recognition,” he lamented.

The Flawed Insurance Rating System

Insurance companies rely on a state-mandated organization, the Washington Surveying and Rating Bureau (WSRB), to assess fire risk and set premiums. Each community receives a rating from one to ten, with higher numbers indicating greater risk. Unfortunately, homeowners in rural areas often find themselves facing higher ratings due to factors that do not account for the capabilities of local fire departments.

Chief Bucy criticized the system, stating, “It’s almost criminal not to include fire district capabilities in that matrix. The risk is relatively low to what they’re claiming.” The current rating system heavily favors urban areas, where metrics such as the number of hydrants, water supply, and building codes are prioritized. In contrast, rural regions, where wildfire response is crucial, receive inadequate consideration in the overall rating.

To highlight this discrepancy, Bucy pointed out that the area where his department saved Lowe’s house still received a dismal rating of 7, despite their proven success in wildfire mitigation. “When we were rated, we found out that that really didn’t mean anything,” he said, underscoring the need for a reevaluation of the rating criteria.

Insurance Companies and Their Response

Karl Newman, President and CEO of the WSRB, stated that fighting wildfires accounts for less than 5% of the overall rating. He noted that the organization is continuously reevaluating its rating structure. However, he emphasized that insurance companies are not currently requesting the inclusion of wildfire information in the ratings, suggesting that the lack of adjustments is a result of insufficient demand from the industry. “Wildfire is not a major part of what we do,” Newman remarked.

This issue extends beyond eastern Washington, affecting communities on the western side of the state as well. For instance, Fox Island, located near Gig Harbor, has a rating of nine, largely attributed to its volunteer fire department transitioning to part-time staffing. Doug Nelson, a former volunteer firefighter, expressed his concern over the rating change, stating that it resulted in a 30% increase in his insurance premium. “The only explanation I was given in the last couple years is the wildfires,” he explained.

The Economic Impact on Homeowners

Many residents in affected areas, such as Nelson, are on fixed incomes, making sudden increases in insurance premiums particularly burdensome. “I only get so much a year coming in, and that’s not going to change for the rest of my life,” he explained, highlighting the direct financial strain that these rating practices impose on homeowners.

Chief Dennis Doan, the head of the Gig Harbor Fire Department and a leader with the Washington State Association of Fire Chiefs, echoed the call for reform in the insurance rating system. He expressed frustration over the metrics used by insurance companies, which often fail to accurately reflect the capabilities of local fire departments. “I am just so frustrated with the metrics that insurance companies use and the different metrics they use,” Doan stated. “Then what really frustrates me is they throw their fire department under the bus.”

Calls for Legislative Action

In response to the ongoing issues with the insurance rating system, the Washington State Association of Fire Chiefs is actively working on legislation to create more oversight and establish a more equitable rating framework. This initiative aims to ensure that the unique challenges faced by rural communities are better represented in the insurance assessment process.

The potential for positive change is critical as wildfires continue to pose significant risks, not only to properties but also to the livelihoods of residents in these areas. By advocating for a rating system that accurately reflects the capabilities of local fire departments, stakeholders hope to alleviate the burdens faced by homeowners.

The Road Ahead: A Path Towards Fairness

As nature gradually recovers from the devastation of wildfires, as seen in Loon Lake near Spokane, it becomes clear that the fight against wildfires and the associated insurance challenges are far from over. “Nature is going to come back,” Lowe said, reflecting on the resilience of the environment. However, the need for a fair and just insurance rating system remains paramount for the well-being of homeowners and the communities that support them.

Fire Chief Mike Bucy has emphasized the urgency of adapting the rating system to align with the realities faced by homeowners in Washington State. “The goal is to bring fairness to the homeowners of Washington State,” he stated, capturing the sentiment shared by many affected residents and fire officials alike.

Conclusion

In conclusion, the current homeowners insurance rating practices in Washington state are under scrutiny as local fire districts advocate for change. The flawed system, which overlooks the capabilities of rural fire departments while penalizing homeowners, poses significant challenges for many residents. As communities unite to push for legislative reform and a more equitable rating framework, there is hope for a future where homeowners can feel secure in their insurance coverage, regardless of their geographical location. The journey towards a fairer system is essential, not only for the financial well-being of residents but also for the resilience of the communities in the face of increasingly frequent wildfires.