Insurance Companies as Allies in Mitigating Community Wildfire Impact?
- An Appeal for Vision in Cooperation -
Beverly B. Voelkelt
Copyright © B.O.R. Consulting
~ A Local Challenge with National Implications ~
As a result of the catastrophic Southern California wildfires of 2003 and 2007 insurance companies started to review their internal policies on insuring real estate in high fire risk areas, such as Lake Arrowhead and surrounding communities. A few companies concluded that their exposure to claims from fire losses was reaching unacceptable levels and started to explore ways to limit this exposure with measures that ranged from cancellation of policies to often demanding unreasonable risk mitigation, i.e. fuels modifications exceeding reasonable standards and scientific criteria. All too often a property owner is not able to comply with these demands and has his important fire insurance policy not renewed.
From a strict, and very limited, business perspective the policy of market avoidance in order to keep profits high by reducing the number of potential claims makes sense. However, this thinking misses a few very important points that can lead to adverse and unintended consequences. It also offers no constructive contribution to the ever-growing impact of wildfires in California, and in the nation. It therefore misses opportunities for long-term solutions that benefit society and insurance companies.
The impact of such policies, the avoidance of markets or unreasonable risk mitigation demands, affect many different areas. On the economic side, for example, they affect the insurability of real estate. Because all mortgages must be backed by fire insurance, not being able to obtain insurance can at best complicate and delay a real estate transaction. Potentially it can also harm the value of real estate. Such policies, if fully implemented, would also affect the aesthetics of the natural forest environment, which attract home buyers and benefits various forms of tourism and associated industries. On the environmental side these policies would also have a significant negative impact because excessive fuels reduction destroys valuable wildlife habitat, affects long-term carbon sequestration in soil and foliage and compromises watersheds by creating erosion issues.
Insurance companies do not operate in a vacuum. Insurance companies are to spread risk and liability from the individual to all in order to minimize the impact on the individual while remaining profitable as a company. Every time a major wildfire occurs insurance companies are affected in one way or another because so many of the problems caused by wildfire are also insured losses. For example, medical issues induced by smoke and air pollution from wildfires affect insurance companies, as do watershed restoration, infrastructure restoration and even losses from economic productivity.
Insurance companies should recognize, as some do, that they are a part of this challenge regardless of doing business in this or other areas susceptible to wildfire impact. Therefore, insurance companies should have a vested interest in supporting the wildfire mitigating efforts underway in the San Bernardino National Forest for the past 12 years. This then begs two questions. Are reasonable risk mitigation parameters already in place in order for insurance companies to underwrite fire insurance policies in the Wildland Urban Interface / Intermix (WUI)? And, how can insurance companies become involved in shaping and advancing the effort of creating more fire safe and fire wise communities? To answer these questions let us examine what is at stake? What is the present understanding of fires in the WUI? And, what existing tools are already in place to address this challenge?
~ Understanding Wildfires Offers Solutions to the Challenge ~
According to the prevailing thinking among wildfire experts, perhaps the single most effective solution to reducing the potential of high intensity wildfires devastating communities and destroying precious forests is the creation of defensible space in and around communities located in the wildland urban interface / intermix. Practical experience and fire science support this understanding with overwhelming evidence.
Careful thinning of overcrowded stands of trees close to and within communities creates healthier, more fire resistant forests and more natural ecosystems because they are closest to historic forests. Accordingly the emphasis must be on thinning fuel density and breaking up continuous horizontal and vertical fuel beds, i.e. the removal of small diameter trees and other kindling type vegetation in order to prevent fires from turning into high intensity infernos.
According to Bonnicksen, who extensively researched historic forests, fire always played an important and vital role in managing the density of forests. Historically however, these fires were mostly low intensity ground and surface fires because these fires occurred in regular intervals every five to ten years, thus keeping the fuel load required for high intensity fires low. These fires cleared the forest floor of weak trees and woody debris. They rarely climbed into the canopy of trees to turn into devastating crown fires that are so commonplace in today’s fire scenarios and extremely difficult to control.
Jack D. Cohen, Ph.D., a leading fire scientist with the US Forest Service, observes that firebrands and embers are a leading cause for home ignition during wildfire. Crown fires are known to produce just that. High intensity and high velocity crown fires suck up a lot of air to generate their own vicious momentum that is so strong it rips burning debris off trees and transports those hundreds of yards or even a mile in front of an advancing fire. Thousands of embers and firebrands up to the size of milk cartons, raining down on homes and nearby vegetation can ignite them easily unless proactive, defensive measures were implemented.
Furthermore, Cohen observes that house-to-house ignition is also an important factor to consider. He and his colleague, Richard Stratton, MS, a fire-modeling analyst with the US Forest Service, produced the “Home Destruction Examination” of the local Grass Valley Fire of 2007. They concluded that of the 199 destroyed and damaged homes, 193 ignited because a. fire spreading through surface fuels within the community and reaching the homes and/or from firebrands generated by burning vegetation and b. from thermal exposures directly related to burning houses (from structure flames and firebrands).
Elsewhere Cohen notes that the radiant heat, which will cause a second degree burn to human skin in five seconds, needs 27 minutes to ignite a house if this house is located 50 feet away from the heat source. Unfortunately principles of economy of scales and profit maximizing almost require subdivisions with parcels too small for fire wise setbacks. Thus, strong emphasis must be placed on preventing house-to-house ignition by addressing fire vulnerabilities in the structure and by addressing vegetation management in the home ignition zone, which becomes the community ignition zone when fire wise setback requirements cannot be met.
Christopher A. Dicus, Ph.D., a leading fire ecologist teaching at Cal Poly State University, San Louis Obispo, is also a strong proponent of properly implemented defensible space through careful vegetation management. However, he firmly cautions against over reaching in the creation of defensible space to avoid exchanging the benefits of vegetation management for fire risk mitigation with negative environmental impacts. He urges planners and policy makers to adopt a holistic approach for developing fire management concepts in the wildland urban interface that address all aspects pertaining to the creation of a more fire safe environment.
The creation of defensible space through vegetation management and fuels modification makes a difference in a wildfire’s intensity and therefore increases the probability of home survival. However, it is important to consider the possibility for unintended consequences and therefore use an all-encompassing holistic approach when attempting to reduce risk and impact of wildfire. Furthermore it is critical to mitigate a structure’s ignition potential through defensive measures on the structure and in the home ignition zone.
~ Existing Tools Available for Community Wildfire Impact Mitigation ~
California Public Resource Code 4291 establishes the basic parameters for the creation of defensible space around structures. Since the beginning of 2009 an additional state law, Senate Bill 1595, also addresses defensible space requirements.
San Bernardino County Code sections 23.0301 through 23.0304 govern Fire Fuel Abatement in the county, taking into consideration the various terrain and vegetation found throughout the county.
On the community level additional requirements are expected under association guidelines, such as the Arrowhead Woods Architectural Committees’ “Existing Home Fuel Reduction Plan”.
Various highly productive government programs have been in place since the devastating bark beetle infestation created alarming forest conditions in the San Bernardino Mountains. US Forest Service, CalFire, S.B. County Fire and local fire departments are connected via the Mountain Area Safety Task Force (MAST) and Mountain Mutual Aid, which also include the participation of law enforcement and all vital utilities. Thus, the interagency communication and cooperation is exceptional and an invaluable asset to the communities for pre-fire risk mitigation and response to fire emergencies.
The US Forest service identifies areas in the national forest with potential for community impact during wildfires and is creating fire behavior modifying defensible space through shaded fuel breaks. Often this work dovetails into fuel management programs by County Fire. These fuel modifications are carefully designed with the help of the Natural Resources Conservation Service (NRCS) and cover non national forest land in strategic locations. CalFire is assisting both agencies with its resources in forestry and forest management.
The benefits of this cooperative, interagency approach became evident during the Grass Valley Fire in October 2007. The community of Deerlodge Park was protected by a US Forest Service – County Fire – Arrowhead Communities Fire Safe Council effort that proved highly successful. Parts of Twin Peaks were protected by a shaded fuel break in the national forest that dovetailed into a County Fire fuel modification area.
Homeowners in the San Bernardino Mountains can participate in Forest Care, a joint venture program between the US Forest Service and CalFire that is administered through the San Bernardino National Forest Association. Forest Care has the objective to create defensible space on private property taking into consideration state and county legal requirements for defensible space. This program is a cost share program that offers the homeowner up to 75 percent reimbursement for the cost of creating defensible space and thus provides a very strong incentive for property owners to voluntarily come in compliance with defensible space codes.
The private sector offers many highly qualified local contractors and timber operators performing the actual work under the existing programs. Not only do these companies support the local economy, because they are local, they very much care about ‘their home forest’. There are also forestry consultants to assist in planning of fuel modification projects and consultants capable of assuming other work under the overall concept of wildfire risk mitigation.
Environmental organizations, like the San Bernardino Mountains Land Trust, the Safe Our Forest Association and the mountain chapter of the Sierra Club, are deeply concerned about wildfire impact on an environment already compromised by the effects of civilization. They support careful, prudent thinning and offer valuable thoughts on minimizing any adverse environmental effects of this effort.
There are several fire safe councils in the San Bernardino Mountains that have strong public outreach programs, organize chipper days and use grant monies to pay for fuel modifications within the communities.
Creating fire wise and fire safe communities is a collaborative effort and everyone’s responsibility. It is therefore conceivable the existing group of already participating local stakeholders could expand to include the Chamber of Commerce, the Board of Realtors, the Association of Builders and others that directly benefit from successfully mitigating community wildfire impact and from creating a sustainable forest environment.
~ Conclusion – Answering the Questions about Insurance Participation ~
As we have seen, while wildfires happen and impact communities on the local level, their effects reach well beyond the areas immediately affected. In fact, the WUI fire challenge has been identified as a national challenge of great significance. Too much is at stake in terms of potential economic and environmental loss, not to forget the safety and lives of firefighters and residents, in order not to realize that action is urgently needed on a broad basis. This is especially true when all levels of government are struggling with dwindling revenue streams, very large deficits and limited fire fighting resources available to respond to multiple wildfire incidents simultaneously.
Insurance companies are major stakeholders in all aspects of societal risk prevention and risk mitigation. From basic liability insurance for business and automobiles, to health and life insurance, to deep sea oil exploration and space satellites – insurance companies are there to cover risks. Insurance companies also promote behavior and public policies that, on a preventive basis, seek to prevent harm and loss. They offer, for example, guidelines on nutrition, exercise and dental care to mitigate health issues; and, they reward good drivers or business with a strong safety record with premium discounts.
As pointed out, science already established reasonable, and proven, criteria for defensible space. Other important WUI criteria, like road construction, turnouts and turnarounds, street signs, availability of water for fire fighting, etc, have also been established. All of which pertain to mitigating wildfire impact on communities in or near the WUI. If these criteria are implemented in a consequent manner, the exposure to potential losses by insurance companies would drop significantly, as would the threat to property and lives, and the cost burden to society. Regardless, fully functional wildfire risk mitigation parameters are already in place for the San Bernardino Mountains and other vulnerable areas.
Insurance companies are in the unique position to be constructively involved in solving the challenges of the wildland urban interface because they can indeed influence behavior via fire insurance policy requirements and premiums. Furthermore, insurance companies can develop incentive programs to encourage individual property owners, as well as entire communities, to become fire wise. This has been recognized and in April of 2008 the International Code Council held a ‘blue ribbon conference’ that included insurance companies and other important stakeholders typically not part of the fire risk mitigation discussion. In order for insurance companies to become effective in this effort, however, they must be tightly integrated in the overall approach of creating fire safe and fire wise communities. This effort must be guided by experts from various academic disciplines that are best suited in establishing criteria for reasonable wildfire risk mitigation, not by insurance companies themselves.
The present approach by some of the largest insurance providers focuses on short term profit only and fails to address long term gain by reducing negative impact of wildfires to society. It would be desirable if insurance companies recognize this challenge as an opportunity to become part of the solution to the WUI problem and voluntarily join the collective effort. On the other hand, it might be necessary for the legislator to establish a clearly defined legal framework for insurance companies regarding under-writing guidelines in the wildland urban interface / intermix. This framework should recognize all aspects pertaining to defensible space and wildfire risk mitigation. For example any legislative changes or amendments need to address the various climatic, topographic and vegetation types found in the state. This would remove the ambiguity that presently adds confusion with respect to interpretation of what constitutes adequate defensible space.
~ Acknowledgements ~
I would like to thank Dr. Jack D. Cohen of the US Forest Fire Science Laboratory in Missoula, Montana for sharing additional thoughts on the WUI fire challenge in our correspondence and his future support to assist our effort to make our communities more fire safe. I would like to thank Dr. Christopher A. Dicus of Cal Poly State University, San Louis Obispo for spending time with me on the phone to answer specific questions regarding vegetation management under eclectic and interdisciplinary considerations. I would also like to thank Dan Bailey of the National Wildland Urban Interface Council in Washington, DC for sharing the latest updates on the work of the new council and his assurance of future support for our effort in mitigating wildfire risk.
~ Selective Bibliography ~
Thomas M. Bonnicksen, Ph.D., “Protecting Communities and Saving Forests”; The Forest Foundation, 2008.
Jack D. Cohen, Ph.D., “What is the Wildland Fire Threat to Homes?“; Lecture, School of Forestry, Northern Arizona University, Flagstaff, AZ, April 10, 2000.
Jack D. Cohen, Ph.D., “The Wildland Urban Interface Problem”; Forest History Today, Fall 2008, pp 20 – 26.
Jack D. Cohen, Ph.D. and Richard D. Stratton, MS, “Home Destruction Examination, Grass Valley Fire, Lake Arrowhead, CA”; US Dept. of Agriculture, R5-TP-026b, June 2008.
Christopher A. Dicus, Ph.D., et al., “Predicted Fire Behavior and Societal Benefits in Three Eastern Nevada Vegetation Types”; Fire Ecology Special Issue, Vol. 5, No 1, 2009, pp 67 – 78.
Richard D. Stratton, MS, “Assessing the Effectiveness of Landscape Fuel Treatments on Fire Growth and Behavior”; Journal of Forestry, Vol. 102, No 7, 2004, pp 32 – 40.
~ Selective Internet Sources ~
“The Blue Ribbon Panel Report on Wildland Urban Interface Fire”, International Code Council, April 2008; http://www.iccsafe.org/government/blueribbon/index.html
“National Wildland / Urban Interface Fire Program – Strategic Approach 2005 – 2009”, NWCG Wildland Urban Interface Working Team; via http://firewise.org http://www.nwcg.gov/teams/wuiwt/wuiwtadm/StratPlan_2005-2009.pdf
“Quadrennial Fire Review 2009”, Comprehensive Interagency Assessment of Wildfire Issues; http://www.nifc.gov/QFR/QFR2009Final.pdf
“Be Ember Aware – Will Your Home Survive When The Embers Arrive”, University of Nevada Cooperative Extension; http://www.unce.unr.edu/publications/files/nr/2009/fs0905.pdf
“Fire Adapted Communities – The Next Step in Wildfire Preparedness”, University of Nevada Cooperative Extension; http://www.unce.unr.edu/publications/files/nr/2010/sp1010.pdf
“Forest Thinning & Defensible Space”, (Explanation) University of Nevada Cooperative Extension; http://www.unce.unr.edu/publications/files/nr/other/fs9255.pdf
“Fuel Management Terms for Homeowners”, (Explanation) University of Nevada Cooperative Extension; http://www.unce.unr.edu/publications/files/ho/2005/sp0515.pdf