Washington Insurance Commissioner Patty Kuderer came to Spokane on Wednesday intending to host a community forum about wildfires and homeowner's insurance. The event was cancelled that morning for timing reasons. Some of the people who may have attended were occupied in some way with Spokane's wildfires.
Part of the post-wildfire experience for fire survivors is dealing with insurance companies.
Kuderer talked with SPR about what her office is doing to address rising premiums or canceled policies for people who live in fire-prone areas.
We started with how families who have experienced wildfire should proceed when they start the assessment process.
This interview is lightly edited for length and clarity.
DN: When you talk with folks who have had a wildfire, is there advice for how soon they should be thinking about this sort of thing and making claims?
Patty Kuderer: Well, each situation is unique, but I would say that it's never too early to start putting your papers together and gathering information and taking photographs if it's safe for you to go back to your home. Our folks, our team, can help people identify what sorts of steps to take. We actually created a toolkit that they'll be able to take and to utilize in just this situation.
DN: You've spent a lot of time thinking about wildfires in your time as insurance commissioner. Do you anticipate this going to become even more of an important part of your office and that wildfires are becoming more prevalent and you're going to have to deal with this an awful lot more?
PK: Yeah, I came from the legislature and it certainly was an issue when I was in the Senate and I can tell you that I took that information that I gathered in the legislature over to the Office of the Insurance Commissioner. Last year, we started out of the gate with a couple of bills that are focused on wildfire.
One is a bill that would help homeowners mitigate against the risk of wildfire. It was a grant program. The other one is to give people more information about what their wildfire risk score is. Those bills made it out of the Senate with strong bipartisan support, but unfortunately got stalled in the House committee. But we're hoping that given what we're seeing, and yes, it's a focus that our office has had trying to raise awareness of the risk of wildfire, we're hoping that those bills get over the finish line next year.
DN: Tell me about why is it important that homeowners know more about their wildfire risk?
PK: Well, because we're seeing pockets of non-renewals and cancellations around the state that are due to wildfire. And people, there are simple things that they can do to reduce their risk for wildfire affecting their homes and so I think it's a transparency issue, first and foremost.
But I think folks, if they have that information, they're going to be more apt to go out and take care of things that they have control over. You don't have control over a lightning strike or an intentional act or even carelessness, for that matter, that might start a wildfire. But you certainly have control over whether or not you have a wood pile up against your door.
DN: So this goes back to your first bill, which is giving or at least granting money to homeowners to be able to do this kind of stuff. Am I correct about that?
PK: Yes, and that is a program that would be run through our office, It would be funded through our regulatory account, which is not general fund dollars.
I think that it's appropriate for us to be more preventative-based and we're going to have to do that because climate change is rapidly accelerating the risk and even though premiums are based on the amount of claims that are paid, we are seeing a stabilization in the market. It's something I want your listeners to know, that we are actually a pretty healthy market here for property casualty. It may not feel like it, especially given the costs of homeowners' premiums. But we actually saw companies filing for small decreases last year. So it's stabilizing.
But the reality is premiums are based on risk and what's happened here, the perception of risk by the insurance company could change. That can affect premiums.
DN: So if I get this right, you're saying you want insurance companies to take individual cases that, hey, we've done the defensible space thing, therefore we should have a lighter or a smaller premium for our wildfire. Is that kind of along the line?
PK: It's along the line. There are actual standards that the Institute for Business and Home Safety have issued and that is an industry-run and owned organization. It's scientifically based, these standards, and if a consumer were to retrofit their home and mitigate against the risk of wildfire to an IBHS standard, then I think the fair thing is that the companies won't non-renew or cancel due to wildfire risk. So that's part of the bill that we have coming next year.
DN: We've got Oregon with one of its worst fire seasons. You've got Utah, which has been hit really hard. Do you think all of these fires in multiple states are going to have a big effect on the wildfire insurance industry, or are we just adjusting things rather than overhauling it?
PK: Well, this is a big event, and we are seeing it happen in other states. But, you know, the premiums are based on claims paid in Washington.
I think the bigger impact is to the perception of wildfire risk in this region or in pockets of this region that we need to be paying attention to and that's precisely what our bills are designed to address. It's to reduce the perception of wildfire risk by fortifying homes against wildfire to the IBHS standards.
DN: Do you think this is changing public perception about where we should be living?
PK: It certainly could have an impact. I think part of our job at the Office of the Insurance Commissioner is to go out into the community and raise awareness of these issues because they're so linked to insurance. Insurance is such an important product for people to have when they have a home, whether it's renting it or whether it's owning it and so it's important for us to make sure that people understand, A, what the risk is so they have as much information as possible. That's our wildfire risk transparency score bill.
And then also, like I said, taking common sense steps to reduce the potential for wildfire to burn your home down. No one wants to live through their home burning down. There isn't enough money to pay you to live through that kind of a tragedy and yet we're in it right now.
What we want to do at the Office of the Insurance Commissioner is make the claim process less painful. We don't want insurance to be an obstacle. People are dealing with enough as it is right now.