Wildfires affecting insurance rates and coverage

TWIN FALLS, Idaho (KMVT/KSVT) — State Farm has asked for permission to raise insurance rates by up to 22% for residents in California due to the destructive wildfires.

With similar fires hitting Magic Valley and the rest of Idaho, insurance companies and officials are concerned.

Dean Cameron, the Director of the Idaho Department of Insurance, says nearly a million acres were burned in Idaho last year. That’s a huge jump compared to the previous year, which was under 90,000 acres.

The destructive wildfires have and will continue to impact insurance rates and coverage. Cameron said that in years past, wildfires were often contained in public lands or forested areas.

Damage to structures was minimal or rare. However, that is starting to change.

“Last year, we had about 141 structures lost, most years we don’t lose any structures,” Cameron said.

Kim Martin, an insurance agent with Martin Rice Family Insurance, said wildfire risks combined with higher construction material costs are affecting insurance rates.

“We’ve been noticing increases across the state. 17% they put for cost of reconstruction, but we’ve seen them go up to 47% total,” Martin said.

Martin’s concern is that homeowners' yearly costs will rise across the state.

“It used to be pretty reasonable here, 368 to 700 dollars a year for the average home. And now it’s a thousand, to 1500 for the average home,” Martin said.

Martin added that while Magic Valley has been hard hit by increased costs related to wildfires, the Boise, McCall, and Sun Valley areas have been hit the hardest.

That’s not the only concern. Cameron also said some insurance companies are reconsidering selling property insurance in more high-risk areas prone to wildfire risk or damage.

“In 2023 we had 91 companies selling property insurance in Idaho, of that 22 of them actually filed notice with us, that they plan to non-renew people’s policy at their anniversary date,” Cameron said.

Cameron said after the devastating fires in 2024, they expect to see that number rise.

Martin added that insurance companies are getting more strict on houses to ensure. They are looking at roofs, locations of shrubbery, and other items that might make the home a fire hazard.

Cameron said the Department of Insurance has submitted bills to help homeowners and encourage insurance companies to stay and offer property insurance to Idahoans. One of those bills, House Bill 17, would provide grants to homeowners to pay to fireproof their houses.

“Replacing wooden roofs with fire resistant roofing. Removing wooden fences with fire resistant fencing. Moving the vegetation,” Cameron explained.

This would help protect neighborhoods and encourage insurance companies to continue offering coverage. Meanwhile, the bill is still in the House.

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