Where I Stand: Aftermath – Wildfires and Insurance after The Dixie

By Bill Martin
What a summer-
Whew!  I made it past another wildfire season in Plumas County without being burned out.  I’ve evacuated twice from Quincy in the last two years.  That’s an expression of self-interest, but I do care about my neighbors who have lost everything—so I am trying to help them with design and construction advice for free.  That’s a bit of altruism—where we care about the fate of others than just ourselves.  There are many individual community members and organizations doing the same.  Some even came from  Redding’s and Paradise’s municipal staffs to help recover water and sewer systems in Greenville.
Everyone would like to move back toward “normal,” but there are many forces moving us away from such a goal.  The now-famous Dixie Fire did not take any lives, but it was very large.  Whole communities were erased and ecological recovery may remain a question mark for years.  The West is still setting new summer heat records, and more people are dying of heat-related illness.
Increased fire severity-
The Dixie might just as easily have been caused by lightning, like many of 2020’s fires.  The results could have been similar, or worse,  due to weather and climate conditions that now vary widely from historical reports and comparisons.  We’ve heard firefighter accounts about “fire-nados” and unusual winds.  We’re becoming more familiar with “Pyrocumulus clouds” that produce unstoppable fire at ground level.
An increasing challenge is that simultaneous fierce wildfires all require maximum resources.  Resource triage is becoming necessary, and solving that would require lots more spending.
It doesn’t matter who is willing to concede that climate change is upon us.  We’ve seen the record setting results that have marched in parallel with our drying forest fuels and soils.  Our late October Bomb Cyclone aside, NOAA (The National Oceanic and Atmospheric Administration) has forecast a La Niña remainder for the winter of 2021-22.  That means low precipitation overall and no dependable break in the drought.  Something’s got to give.
Home insurance cancellations in wildfire zones-
Former temporary California insurance regulation forbade companies from dropping property coverage, but now that it’s expired, the renewal refusals have grown by tens of thousands.  And no wonder, when in 2019, insurers paid out $1.70 in claims for every dollar of premium collected.  That’s unsustainable, and it’s likely why some insurers walked away entirely from California’s $8 billion-a-year insurance business in response to the “no-drop” rule.
Insurers can’t repeatedly pay out more than collected premiums and investment proceeds, minus overhead.  Homeowners can’t afford to take the full risk of a property loss, and lenders won’t loan mortgage money without adequate insurance protection.  It’s a hard-to-solve circular riddle.  We could wink and accept under-insuring a property but access to loan money would stop.  We could go without insurance, but banks would call-in all their mortgage loans or re-possess property.  We could raise rates, but fewer buyers could afford a mortgage plus insurance to qualify.  These options all revolve around arithmetic.  Other options do not.
We can’t change the risk of wildfire ignition on undeveloped private or public lands—particularly forests.  But we could attempt to alter the fuel loading over millions of acres, rendering it less able to advance wildfire’s intensity and rate of spread for firefighting leverage.
For growth and survival, trees need sunshine, moisture, and nutrients.  Sunshine fosters growth, but relies on adequate moisture and nutrients carried only by that moisture into decent soil.  Cover the ground with thick layers of duff and litter, and all but the heaviest rainfall deposits will evaporate from this material without ever reaching organic soil.  Similarly, in well-to-overstocked stands of trees, a greater share of minor precipitation will face interception by boughs and ladder fuels, then evaporating.  Even snowfall into tree crowns can sublimate from ice-to-vapor if conditions are favorable—again denying moisture to roots.  Any reduction in adequate moisture reduces defense against bark beetle attacks.
Certainly all these processes are “natural,” but Nature has been denied the opportunity to periodically reduce ground fuel by frequent low intensity fire.  We have been slaves to total fire suppression for 100 years and there has been resistance to management by fire to correct the situation.
If you’re an insurance company underwriter, you’re looking at fire risk to developed property first, with all the risks inherent in a household.  Then, consider the proximity to regional tall forest fuels, topography, wind patterns, and nearby fuel loading.  The last piece of this risk calculation “puzzle” will involve a structure’s immediate distance to heavy fuels, their density, and whether the home meets California’s 2008 standards for ignition prevention at construction or by retrofit.  This is referred to as home “hardening” against external fire ignition.
Home hardening-
As I approached a construction start in 2012, I was a bit cranky about the 2008 fire code requirements for fireproof venting.  But after the nearby Minerva, North Complex, and Dixie fires, I feel differently.
Watering of roofs (if you’re at home when fire approaches) won’t help if water pressure drops or power from a well system fails.  Wet roofs will not stop embers and firebrands from entering attic space through porous eave venting.  Too many photos of incinerated housing show that large trees are too close to houses.  The house is gone and the trees are scorched but still standing.  Defensible space recommendations go out every fire season to deaf ears.
When whole communities are threatened by wildfire, your local fire department would be able to save more property if more of them were hardened, partially or fully.  Your insurance company would be appreciative, too.
Regulatory roles-
Even if the Public Utility Commission demands and gets better protection from wildfire ignitions by our state’s electrical utilities, we are still left with accidental ignition by sloppy campers, in-forest equipment accidents, and arson.
We can’t change the course of weather and climate, locally.  So the only preventative measures reside in forest management practices and wider structure separation from fuels.  Both of these can be improved by more comprehensive regulation.  We could lower the risk of property loss if incentives resulted in the hardening of existing homes.  Since a hot burning house next door raises the risk to my house, I would prefer that its porches and side yards were not stacked with multiple cords of firewood.
McClatchy, (then the parent company to the Sacramento Bee and other daily newspapers) reported that in Paradise, CA, half the homes built after the 2008 fire code standards survived the Camp Fire, while less than 20 percent of the older housing stock did.
These facts are not lost on insurance companies, who have no direct authority to enforce building standards or occupant habits.  Local jurisdictions have that capacity.  Until the state department of insurance writes particular standards and local governments set rules—insurance companies will remain wary about deciding how to set your rate differently from mine in the same neighborhood.
Economic disruption-
The effect of wildfire on us is not just buildings burning and insurance settlements paid out for re-construction.  Ask anyone who’s survived the large California fires but lost a home.  Compensation is a gauntlet, not a cake walk.  Many are still waiting for full compensation.
Money and future citizens’ plans are tied up in fire negotiations, court actions, and settlements that can take years.  Everything remains on hold, and the COVID Pandemic doesn’t help.
Property burns, toxic cleanup begins, the property tax base is reduced, and local government budgets feel the pinch—resulting in less ability to provide citizen services.
Evacuees try to buy temporary replacement housing nearby, only to find that it’s not insurable.  The California (last resort) FAIR insurance program is available, but it only covers fire loss without all the other damage and liability supplements common in homeowner insurance.  It also costs far more.
In California’s rural communities, surrounded by forest fuels, nobody is safe unless all are safe.  We can’t stop all ignitions and can’t halt climate change.  What we can do is replace conflagrations with forest fires.  We could reduce suppression costs by lowering fuel densities.  And we could tighten regulation to cause better structure hardening that would limit fire spread once it reaches a community.  These steps might give insurers and banks more confidence reducing the lopsided relationship between fire insurance premiums and fire damage payouts.
—Bill Martin, Quincy
This writing was done with the help of published articles by Dale Kasler of the Sacramento Bee between 2020 and 2021.