How Insurance Contributes to Large Fire Damage
New research on the causes of our increasingly large and damaging wildfires across the West contains some important surprises. While it is glaringly apparent that summer temperatures and increased fuel loading are important contributors, other factors are equally important and much less obvious.
Under the perverse rubric that no good deed goes unpunished, modern fire insurance schemes are a major factor. Thank heavens we have good fire insurance. But good fire insurance means most of us no longer focus our efforts on preventing fires in the same way we would were we solely responsible for our own fire prevention, mitigation, and suppression.
Put simply, the relatively low cost of fire insurance makes it less likely that I will take stringent measures to protect my home and property, like thinning trees and clearing brush, than I might take if I had no insurance: If it burns down, I can replace it.
While this simple relationship of cost of insurance versus the cost of mitigation may be apparent, less apparent is the role insurance companies unwittingly play in wildland fire policy and development in the wildland-urban interface, the place where trees touch the eaves of houses. No laws or ordinances prevent building there.
Because government wildland fire suppression has become so omnipresent, even in very rural areas, I can now build my home in places where I would not have 50 years ago, confident that government firefighters will help me if a fire starts.
Government firefighters are completely focused on protecting the most valuable assets in a given fire area. They will expend every effort, up to and including taking life-threatening risks, to save subdivisions built in the red zone where fire has always been a problem.
As a homeowner, I have cheap fire insurance, no requirement by my insurance company to protect myself in any way, and large government firefighting agencies (GFAs) that will spare no effort to defend my home no matter where it is located. The same can be said for people who build their homes along the banks of the Missouri River, hoping the Army Corps of Engineers will control flooding.
For these same reasons, volunteer firefighters have markedly declined. Many rural fire departments are no longer viable. The Custer VFD now has 23 members on the roster, down from over 50 with a waiting list not long ago. The GFAs and insurance companies have circumvented what used to be private and personal responsibility for fire prevention, mitigation, and suppression.
In general, the private contribution to managing fire risk is falling or disappearing altogether. Public expenditures in terms of labor input and overall spending, especially state and federal, are growing exponentially, with the Forest Service fire budget alone now taking more than 50 percent of the agency budget.
The lack of meaningful participation in requiring fire mitigation from policyholders means insurance companies are fueling the problem with unrealistically cheap fire insurance. Aided by an almost complete lack of meaningful fire ordinances and building codes West-wide, developers are building wherever they like, often in historically dangerous locations including red zones where fires are a certainty.
As with flood insurance, taxpayers are subsidizing development in places where development would not make sense otherwise. Individual property owners are relieved of responsibility to either act to protect themselves or to band together with others to provide protection for the public good in firefighting cooperatives like VFDs.
One result is that fires are bigger and more damaging because, by focusing on protecting risky development, firefighters sacrifice ground and resources they might otherwise protect.