Fire Mitigation in the Foothills: What You Should Know About Your Homeowners Insurance

Wildfire is a growing threat in the Rockies, where the population is exploding in the foothills and mountain areas. As more people build homes, operate businesses and recreate in areas where wildlands border urban areas, wildfire threats to properties and lives increase. Those migrating to these spaces aren’t always fully aware of the dangers that living in areas susceptible to wildfires, also known as Red Zones, can present. More than two million Coloradans live in the Wildland-Urban Interface (WUI) which encompasses any area where man-made improvements are built close to, or within, natural terrain and flammable vegetation, and where high potential for wildland fire exists. Homeowners must be aware of the insurability of property before moving to or building in these high-risk areas, and prepared to take steps to prevent this hazard.

In recent years, Colorado has seen a number of destructive wildfires break out throughout the state, which in many cases have destroyed or damaged homes and other property. Fire mitigation steps like clearing brush and trees from a perimeter around homes, or replacing wood shake roofs with tile or asphalt shingles, can help reduce the risk to property. Recent surveys conducted by the Rocky Mountain Insurance Information Association tell us that Coloradans overwhelmingly consider wildfire mitigation to be an important personal responsibility of homeowners who live in high risk areas. The majority feel there should be insurance consequences for those who refuse to take steps to protect their property from the threat of wildfire.

What is Wildfire Mitigation?

Wildfire mitigation actions are on-the-ground treatments of forested properties implemented to reduce the threat of wildfire. These actions can take place before, during or after a wildfire has occurred. The Colorado State Forest Service (CSFS) is the lead state agency in fuels mitigation expertise in Colorado and an excellent resource for residents who want to gain more information and take steps to decrease the threat of wildfire to their property. The organization develops and distributes educational materials and special programs to assist homeowners, landowners and communities in taking action to reduce their wildfire risk. Another resource is your local fire protection district. Most will come to your property to do an assessment free of charge.

How Comprehensive Is Your Insurance Coverage?

Damage to your home from a wildfire is generally covered by a standard homeowner’s insurance policy, just as damage from any other type of fire would be. Homeowners living in areas at risk for wildfires should double-check their policies to ensure they have adequate coverage to rebuild their home if it is destroyed.   One way to quickly calculate if you have sufficient coverage to rebuild your home is to divide the dwelling policy limit by the home’s square footage. If the number is less than $200 per square foot, you’re probably under insured and should consider purchasing more coverage.  Another way to determine if you have enough insurance coverage to replace your home is to ask a local contractor what the current labor and material costs are for your area. It is critical to understand how much per square foot it would cost to replace your home.

Insurance agents often recommend adding extended replacement coverage or replacement cost coverage to your homeowner policy.  Extended replacement coverage provides homeowners with additional coverage to replace the home in case of surge demand. Surge demand is a dramatic increase in the cost of labor and materials in a fire zone at a time when many homeowners are in need of contractors and reconstruction services at the same time.  This can present a significant problem. Case in point: Many homeowners in Colorado Springs and the Boulder canyons found themselves to be severely underinsured following the fires that devastated the areas in recent years. Replacement cost coverage is harder to find for homes in fire zones, but it is definitely something to look into.  This additional coverage will ensure replacement regardless of the dwelling limit on the policy. It is considered to be the best coverage for your home.

Building Ordinance is also an important coverage, especially if your home is more than 15 years old.  It provides additional coverage in the event that current updated building codes increase the cost to repair or replace your home.

Most insurance policies will pay to replace or clean smoke and/or water damaged furniture and personal belongings resulting from firefighting efforts. The amount a policyholder receives depends on the amount of coverage purchased.  Most policies will pay small amounts to replace landscaping, and some will cover costs incurred from fire department response charges.

Standard insurance policies will also cover additional living expenses in the event of a disaster. This will include the cost of living away from home in the event of a mandatory evacuation, or if the home becomes uninhabitable. These costs include hotel bills, meals out, additional work commute expenses, etc. Coverage for additional living expenses will vary from insurer to insurer, but policies often provide coverage for 20 percent of the dwelling amount on the policy.

Overall it is critical to remember that protecting a home, property and a community from wildfire is not a one-time effort. It is a process and requires ongoing participation, maintenance and shared responsibility. We at Denver West Insurance Brokers are well-versed on how to determine the most comprehensive and accurate coverage to protect your home, belongings and livelihood. Call us to review your insurance needs today!