Arriving on the scene after a wildfire has ravaged an area is never easy. One can only imagine what experiencing such devastation is like for the victims of these fires, who have lost homes, livelihoods and even loved ones.
The first thing I notice is the smell, as burning synthetics and dead livestock coat the air. Then, it’s the ash. I’ll often have to dust three to four inches of snow-like ash off the rental car before I can open the door. All too frequently, when I arrive at a policyholder’s property, I can still see active flames continuing to burn on nearby hillsides. Sometimes, I have to move from hotel to hotel as evacuations accompany new fire threats in the area.
My company insures wineries — an industry often threatened by wildfires. We pride ourselves in our boots-on-the-ground approach to claims handling, particularly after our clients are impacted by wildfires, and the last few years haven’t been easy. But this year has been different.
The COVID-19 pandemic has changed everything from how we socialize, work, educate, shop, seek medical assistance and more. It’s also changed the way we’ve handled claims during yet another record-breaking year for wildfires in the western U.S. In 2020, we may have adjusted to masks, virtual work and virtual education as our “new normal,” but frequent and fierce wildfires are also settling in as the norm. Just looking at things in terms of insurance claims, annual payouts totaled $100 million from 1964 to 1990, rose to $600 million from 1991 to 2010 and jumped to $3.7 billion from 2011 to 2018, according to Bloomberg.
The pandemic and yet another aggressive fire season have forced us (and the entire insurance industry) to refine how we approach risk assessment, loss control and claims. We are adapting.
Twenty-five years ago when my company first started, insurers did not have this boots-on-the-ground approach to wildfire risk — at least in terms of wineries. Many of us used risk monitoring systems as our only source when assessing wildfire risk for a property. Now, we understand there are nuances in fire behavior. For example, we look to the fire triangle — weather, topography and fuel — to gather information about a risk and inform loss control. We try to tackle each side of the triangle.
In recent years, we have made advancements in our understanding of topography and fuel. We now use topographic maps to plot out where properties are located and whether or not they are near topographical features like drainage ditches or large forested areas, which can provide more fuel for a fire. We also use drones to survey the property, take imagery and measurements, evaluate defensible space and calculate insure-to-value to provide accurate coverage and offer risk mitigation tips. This allows us to be more surgical in our underwriting and risk management.
In terms of loss control, things are changing as well. We have always proactively approached clients, offering them fire risk assessments and loss mitigation tips. Now, they are coming to us seeking ways to mitigate their fire risk. There’s a new awareness and a sense of urgency among property owners in this region and wineries are taking fire mitigation seriously. They are examining and improving defensible space on their properties, installing remotely controlled sprinkler systems on their roofs and hiring privately contracted fire fighters, among other measures.
There are really no predictive models for wildfires that can accurately assess wildfire risk the way we can for hurricanes and floods. Largely, fire risk depends on individual, hyperlocal circumstances. As a company and as an industry, we are continuing to study fire behavior and wind events to learn more. We know this — wildfires remain unpredictable and they are not slowing down. Frequent fires will be the new normal. As an industry, we can be a source of stability in a troubling time by being responsive and proactive.
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