June 12, 2004
By Angie Wagner
Associated Press

Wildfires that burned thousands of homes in California last year were the most expensive in history for the insurance history, and other wildfires compounded the costs by burning hundreds of homes in Arizona and Colorado.

With another bad fire season predicted this year, insurance companies are nervously watching forecasts and urging forest-dwelling homeowners throughout the West to clear brush, trim trees and take other steps to protect their homes.

So far, though, most insurers haven't raised rates or restricted homeowners. Instead, they are largely hoping that the massive fires were a fluke.

"It was an anomaly of sort,' said Bill Mellander, spokesman for Allstate, of the California fires. "A fire event of that size you think is not going to be an everyday event.'

In California alone, insurers processed more than 19,000 claims and paid out $2.04 billion in damages from last October's Cedar and Old fires, according to the Insurance Services Office Inc. That number was almost half of all the premiums collected in California the year before.

The two fires combined were the most expensive ever, although the 1991 Oakland Hills fire in California ranks as the most costly single fire at $1.7 billion, the Insurance Services Office said.

Another bad fire season is expected this year, with dry conditions in southwest Arizona, New Mexico, Southern California, Washington and Oregon making them susceptible, said Rick Ochoa, national fire weather program manager for the Bureau of Land Management in Boise, Idaho.

Insurance companies are paying attention to the forecasts, and they are encouraging homeowners to clear brush, trim trees, remove firewood and re-evaluate roofs. But they are not making those steps a requirement of coverage. Safeco insurance is re-examining its risk in some areas, but says the review is routine and not related to wildfires losses.

Foresters have encouraged insurance companies for years to require homeowners to clear brush and trees and to use fire-resistant building materials, especially on roofs.

John Garamendi, California's insurance commissioner, doesn't understand why more companies don't require those precautions.

"It should be that way,' he said. "Some companies do it that way and other companies just look at maps and don't bother looking at the house. They don't have a clue where the house is or what the risks are. I think that's wrong.'

More companies are looking at the requirements, said Pete Moraga, spokesman for the Insurance Information Network of California.

"If the homeowners haven't kept up the clearance, there may be changes in the way that policy is drafted for the following year,' he said.

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