Fighting future losses in the midst of fire season

With 68,775 blazes already this year, the 2006 wildfire season is well on its way to becoming the worst in 10 years, according to the National Interagency Fire Center (NIFC). Its data shows 5.03 million acres have burned, eclipsing the 4.9 million acres burned in 2004, and overshadowing the 10-year average of 2.8 million acres.

In California, the Department of Forestry and Fire Protection (CDF) estimates expenditures for this year’s fire season to be $105.3 million for suppression efforts and $49.4 million in damages.

More than 5,600 wildland fires burn more than 172,000 acres in the California Department of Forestry jurisdiction each year. And as fires threaten businesses and homes, it leads to disruption in the lives of property owners and millions in insured losses.

In 2003, 4,847 structures were destroyed in San Diego County, and 1,003 were destroyed in San Bernardino, causing $1.9 billion in insured losses, according to Tully Lehman, industry spokesman for the Insurance Information Network of California. CDF reported 21 people lost their lives that year to wildfires.

In 1991, the Oakland hills fire in Alameda County, Calif., claimed 25 lives after burning 1,600 acres and 2,900 structures. Damage from that fire totaled $1.7 billion, Lehman said.

This year is particularly concerning because summer weather conditions continue to impede control of the heavy wildfire activity, blackening wildlands nationwide. NFIC has predicted dry thunderstorms to develop in the Northwest, northern California, northern Great Basin and northern portions of the Intermountain West in the near future. NFIC also expects hot, dry, wind over the central and southern Plains — all favorable conditions for fires.

The NFIC Web site stated as of July 25, 2006, 13 wildfires were burning in California, 11 in Nevada and seven in both Arizona and Idaho. Oregon had six ablaze, Wyoming four, Washington two and Colorado, Texas, Utah and Minnesota each had one.

California Gov. Arnold Schwarzenegger recently signed an executive order calling for additional staffing and resources to protect local communities from wildfires and to allow the CDF to expand its statewide firefighting efforts. He also declared a state of emergency for San Bernardino County, Calif., as a result of the Heart Millard complex of fires in the San Bernardino National Forest. As of July 25, that fire was 62 percent contained but had burned 23,917 acres, a near 40-square-mile area, according to the NIFC. Steep terrain and inaccessibility have impeded containment efforts, although crews managed to keep the flames at bay for a week. Nevertheless, creeping and smoldering fire behavior threatens numerous residences.

In response to the recent fires of Southern California, Insurance Commissioner John Garamendi urged homeowners affected by fires to contact the California Department of Insurance’s (CDI) Consumer Hotline, 800-927-HELP, with insurance questions or concerns regarding the catastrophe.

Measuring risk

Wildfires are increasing in frequency and severity as more people move into areas where developments meet or intermingle with undeveloped wildlands. The buildup of fuels, the previous wildfire strategy of total suppression, historic settlement patterns, population growth and global warming contribute to increasing the potential and risk for wildfires. Almost any state can be the scene of a wildfire with the right fuels, right weather and source of ignition.

Lightning is the most common cause of wildland fires, reported to cause nearly 80 percent of remote wildland fires in the United States. But fires also are started, directly or indirectly, by people from cigarettes, campfires, arced power lines, arson and other means. Wildland fires spread in areas that include dense, dry brush (the fuel) and very dry weather. Areas exposed to high wind are particularly vulnerable, and remote locations with poor roads make firefighting difficult.

The combination of wind, temperature and humidity in the burn zone exacerbate wildfires. Strong winds push flames and burning embers toward new fuel sources. Blowing wind can also serve as a fuel drying source in moist areas.

The topography of a landscape — its elevation, direction and steepness of slope, and exposure to sunlight — also affects the spread of wildland fire. Certain fuels grow better under different conditions; and the amount of shade or sunlight, the temperature of an area, and moisture received by an area all determine the type of fuel available for wildland fires.

With such wildfire concerns, insurers have become more discriminating in the risks that they write. Many companies have rules that will not allow them to write within a certain number of feet from brush. The idea is that if homeowners and businesses stay away from brush, they will lower fire losses.

To limit losses, insurers also are turning to technology, using geographic information systems and such devices as Riskmeter’s underwriting screening tool that can help insurers determine how far a building is from vegetation that could potentially burn. “Basically if you give us an address, we’ll tell you how far it is from the nearest brush,” according to Dan Munson, vice president of sales and marketing, CDS Business Mapping.

ISO’s Fireline geographic information systems product focuses on three key wildfire risk factors: fuel, slope and road access — to assess the overall hazard rating for each property, down to the street address. The tool uses a combination of digital elevation models, detailed satellite images and street maps, enabling insurers to better pinpoint a property’s exposure to wildfire hazard, then help educate homeowners and businesses.

Because companies have been hit hard by wildfires in the past few years, especially after 2003, tools such as those are becoming standard, Munson said. In 2003, people lost houses a half of a mile away from the fires he explained. “There was so much ash in the air that even though they were far away the embers got to their houses and burned them down. That was the biggest surprise to me and I think the biggest lesson learned from the 2003 fires.

“Most companies will require agents to check for brush using a tool like ours,” he added. “It’s important for agents to realize this.”

Mitigating damage

Meanwhile, to mitigate wildfire damage, The American Planning Association has released a report stressing the need for a combined effort from local, state and federal governments, fire agencies, and residents. “There is no one single approach to dealing with wildfires. Everyone shares in the responsibility to mitigate wildfire damage,” said Stuart Meck, senior research fellow at APA. “This includes implementing development design standards to help mitigate fire damage, and engaging and educating residents on their role in preventing wildfire damage.”

The extent of wildfire destruction depends on a number of developmental decisions, including building design, subdivision design, landscaping and land-use regulations, and management of biological fuel loads, according to APA’s report. The authors stressed the need for building codes that require fire-resistant construction materials such as nonflammable siding (brick, stucco and adobe construction); fire-resistant roofing, eaves, fascias and soffits; and spark arrestors on chimneys.

Residents play an integral role in mitigating damage by maintaining their property. The report advised homeowners to consistently remove flammable debris from their property to reduce available fuel sources. By maintaining a defensible space around their home and applying recommendations for home and landscape maintenance, residents can reduce the likelihood that their home will ignite.

Families can guard against nature’s forces by practicing evacuation plans, developing detailed household inventories and maintaining fire safe landscaping, according to the IINC.

Additionally, planners and communities need to examine the risks presented in new development proposals. For example, placing homes on slopes increases their vulnerability to flames. The report recommends new developments be required to have multiple entry routes to prevent residents from becoming trapped, and increasing accessibility for emergency responders.

“Planners play an integral role in developing communities that foster a safe and enriching environment for residents,” said James C. Schwab, senior research associate.

Wildfire preparation

Lehman said there are two main aspects to fire preparation —physical and financial. To physically prepare for a wildfire, he said to consider fire-resistant landscaping.

“Clear a defensible space around your home. Keep all the dried brush off your property, and clean out any dead branches and trees. Clear your roof, and use fire retardant material if possible,” he said.

Financially, “One of the things that an insurer can do is to determine whether a homeowner [or business] has the proper insurance, as well as to ask the homeowner to do a home inventory and store it in a safe place away from [their] home,” Lehman said.

Inventories can be supplemented with photos and videos, and can be stored electronically. Free home inventory software, as well as an inventory guide in pdf format, is available at IINC’s Web site (www.iinc.org). “What the inventory guide does,” Lehman said, “is walk homeowners through their home, room by room, and allows them to identify all the different things they have in their houses — clothing, furniture, electronic equipment or whatever. It also allows space for serial numbers, receipts and pictures.

“Then, if they have a loss, they can go to their insurer and pull out the list of everything they had in their home and it can all be easily identified,” Lehman continued. “A check within the limits of the policy can then be cut much faster, helping policyholders to get back on their feet sooner. It also helps the insurer to determine how much insurance is needed compared to what they have.

“One of the biggest misconceptions in fire preparation is that wild fires only occur in California or Arizona,” Lehman added. “But they can occur in all parts of the country and it’s best to be prepared for that kind of a situation.”

Topics California Trends Catastrophe Carriers Profit Loss Wildfire Property Homeowners