See Why Wildfire Data is All the Rage in the Underwriting Process

See Why Wildfire Data is All the Rage in the Underwriting Process

Jun 30, 2020

Wildfires decreased in number in 2019 compared to that of the previous year, but they still neared 50,500, according to the Insurance Information Institute. With those fires come risks to homes and businesses.

California has more than 2 million properties deemed at high or extreme risk for wildfire, according to the 2019 Verisk Wildfire Risk Analysis. Other highly prone areas were Texas, with more than 717,000 properties at risk, and Colorado at more than 370,000. That’s why it’s important for underwriters who are considering property, particularly in these high-risk areas, to evaluate for wildfires.

Landscape, Structures Could Promote Wildfire Spread

Underwriters should take note of how large a property is, whether it’s less than 1 acre, 1-10 acres, or more than 10 acres, to judge how much land could burn. Its primary use may also create risk because a farm or primary residence may have more oversight than a seasonal or secondary home.

A reason wildfire spreads easily is embers, which are burning pieces of airborne wood or vegetation that can be carried for more than a mile and cause spot fires. A property’s characteristics could make it more at risk for these embers to cause damage.

Land slope, wind, and vegetation are all factors in how easily a wildfire can spread.  Photo Credit: “Grass Fire” by Steve Buissinne / CC BY 4.0

One such element is a landscape’s slope – its degree of slope and whether a structure is above or below the slope. Fires spread uphill faster than downhill, according to How Stuff Works, and their speeds increase the steeper it is. This is because ambient wind, which typically flows uphill, guides the fire as does the fact that smoke and heat naturally rise, spreading it to objects that are higher.

Other outbuildings that could be damaged, such as barns, carports, detached garages, lean-tos, sheds, or other farm structures should also be included on the policy. The condition of the structures could make a difference in flammability, including if they are collapsing or have dry rot, roof issues, paint peeling, siding concerns, or broken glass. Mobile or manufactured homes or structures that are under construction or in renovation are at higher risk for sustaining more fire damage.

On the other hand, homes and structures with fire-resistant siding, including brick, fiber cement, plaster, and stucco, are considered much safer. Dual-paned tempered glass windows also prevent embers from collecting.

Prevent Wildfires from All Sides

Wildfires, such as the La Tuna Fire in 2017, can cause damage to thousands of acres in a short time.

One area that should spark interest to underwriters is the building’s roof. Any significant tree limbs touching the roof increase the likelihood of fire spreading from one item to another. Debris accumulating on the roof and gutter make it more flammable and should be cleared.

But the roof can also offer fire protection. A spark arrestor on a chimney can prevent flammable debris from escaping outside the home. Class A fire-proof roofing products, such as composite shingles, metal, concrete, and clay tiles, can prevent the roof from igniting, but these should be inspected to ensure none are loose or missing and creating a weak spot. The vents on eaves should have screens to keep embers out.

What surrounds a structure could be a fuel source in the making. Dense brush, timber, and hardwoods create heavy risk, compared to light brush or small trees that have adequate spacing. Short grass and weeds pose a smaller threat. If any of these items are nearby, the distance from the structure makes a difference. Less than 150 feet to more than 1,000 feet impacts the degree of threat. The direction the fuel source is located to the structure could also make a difference because of how winds typically blow.

Policyholders should also know not to store flammables or combustibles near the building or under a deck.

You Can’t Always Prevent Wildfires – But You Can Prepare for Them

The U.S. Forest Service Research Data Archive found that 85% of wildfires started by something related to humans, including burning campfires or debris, discarded cigarettes, downed power lines, and arson. The rest ignited by natural causes, such as lightning. Wildfires can be difficult to control, particularly if conditions are right to spread them quickly. Underwriters should not only consider how the policyholders can reduce their risks for wildfire damage but also what features could help them if one does start on the property or nearby.

Underwriters should consider where fire hydrants and other water sources are located.  Photo Credit: “Hydrant” by Denise McQuillen / CC BY 4.0

Water availability is a significant consideration of how an insured can stop or slow the wildfire. A lack of fire hydrant or a more than 1,000-foot distance from one increases risk. However, irrigated landscapes and sprinklers for the exterior roof could decrease it.

Emergency action plans should be available with planned escape routes. Policyholders are safest when they have two or more primary roads that are wide enough to allow for multiple vehicles to pass. Those with only one way in and out or who are on a cul-de-sac or dead-end have more limited options, making it more dangerous. The egress features, such as being smooth, unpaved, dirt, or asphalt, could also play a role.

It’s important policyholders can evacuate and also that emergency responders can enter. Adequate roads are important and should be clearly marked with street names and numbers. Driveways need to be at least 12 feet wide with a 15-foot vertical clearance. This will aid emergency personnel in getting to the area and extinguishing the fire.

Burning Questions Should Be Answered

It’s important policyholders and insurance carriers take careful considerations in wildfire-prone areas. In November 2018, the most destructive wildfire month in California’s history, wildfire insurance losses topped $12 billion, according to the California Department of Insurance. Rather than underwrite a policy with not enough coverage or denying it altogether, let JMI Reports help you assess the property’s true wildfire risk.

We’ll evaluate the property structure and land characteristics that may impact what could happen in a fire or other peril. JMI Reports can customize reports to better fit your needs. Click here to learn more about the wildfire assessments and other services we provide.

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