Insurers try to prevent losses in wildfire hotspots

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Spooked by devastating wildfire seasons, the nation’s top insurers are inspecting homes in high-risk areas throughout the West and threatening to cancel coverage if owners don’t clear brush or take other precautions.

The inspections have angered homeowners and watchdog groups that accuse the companies of trying to cut risk at the expense of customers, even while industry profits soar. The complaints echo concerns raised after Hurricane Katrina, when many insurance companies increased rates or dropped policies along the Gulf Coast.

“It certainly isn’t fair for these insurers to be dumping these last-minute requirements on homeowners,” said Carmen Balber of The Foundation for Taxpayer & Consumer Rights. “It does make sense to require homeowners to take reasonable precautions, but some of the excessive demands that we’ve heard from homeowners are over the top,” she said.

The requirements can include clearing brush, cutting down trees or installing a fireproof roof.

Insurers and industry groups counter that making people take responsibility for living in the highest-risk fire areas is good business sense.

“Insurers are in the business of measuring and attempting to put a price on risk,” said Candysse Miller, executive director of the nonprofit Insurance Information Network of California. “We are encroaching further and further into hillsides and areas where we should not build, and insurers have to take a look at that.”

Catastrophic fires, including wildfires, caused $6.4 billion in insured losses between 1986 and 2005, with more than $2 billion of that amount stemming from massive firestorms in 2003 in Southern California, said Loretta Worters, a spokeswoman for the Insurance Information Institute.

In California alone, more than 6 million homes stand in wildfire red zones, and the number of homes built in remote “wildland communities” is expected to increase by 20 percent during the next decade.

Yet a survey conducted by Allstate in California’s most high-risk communities found that more than three-quarters of homeowners thought it was somewhat or very unlikely that their homes would burn.

Allstate has inspected homes in high-risk fire areas in Washington, Oregon, Idaho, Alaska, Colorado, Nevada, New Mexico, Utah and Arizona, spokeswoman Megan Brunet said.

State Farm has inspected thousands of homes up for new and renewed policies in high-risk areas in those same states, as well as in Wyoming and Montana, spokesman Jeff McCollum said.