Wildfires have insurance agents scrambling
“They were concerned if they were up to date with their homeowners policies and what their coverage was,” Davis says. “It takes these things for people to realize the importance of having an updated coverage.”
After the Coal Seam Fire, Sue Froeschle, a spokeswoman for the White River National Forest, says she’s nervous because she hasn’t updated her own homeowner’s insurance since she bought her house in Glenwood Springs in 1993.
“You look around and see the magnitude of how much it will cost to replace the stuff you have,” Froeschle says.
In a week, the 12,000-acre Coal Seam Fire, near Glenwood Springs, destroyed 28 homes and left and estimated $5.5 million in damages, according to the Garfield County Assessor’s Office.
“The questions are: “Will my insurance be enough?’ and “How often do you revisit the premiums?'” Froeschle says. “The reality is we all know construction costs have gone up so you better be covered.”
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Another concern is that one natural disaster could be followed by another, Froeschle says.
“A mudslide could come after the fire in Glenwood Springs, and it has the potential of destroying as much as a fire,” she says.
For one week, half of Davis’ insurance carriers froze coverage in Glenwood Springs; some pulled out of the state altogether. There’s no ban in Eagle County yet, Davis says, but if the Fulford Fire had gotten any bigger that could have been different.
“If there had been a freeze in Eagle County, we couldn’t have written new coverage or altered existing premiums,” Davis explains. “People who haven’t paid attention to their insurance policies should do it immediately, because construction prices in Eagle County have gone way up.”
Minturn residents could face some problems, too, because most of the old houses in town are appraised below their true value, Davis says.
“If something happens and they have to rebuild them, they’re not going to use old stuff, so the insurance will not be enough,” he adds.
Another high-risk area is Red Cliff, where, if there’s a fire, it would take fire trucks longer to get there.
“Insurance companies are not willing to take all the risk in places like that, so it’s difficult for homeowners to get a decent insurance.”
Davis recommends getting homeowner’s insurance covering structures for for fire, theft, lightning, hail and wind. With respects to coverage for mudslides, people should check with individual carriers to see if they are covered.
Debbie Brill of Brill Insurance Agency in Eagle-Vail says it’s up to the client to make sure their insurance is sufficient. Policies have automatic features, which often include belongings, she adds. Most insurance companies will pay between 50 to 75 percent on top of the value of the policy for the property, she says.
“But people should itemize their belongings before getting an insurance policy. That will help them to remember what they had if they lose the house.”
Another important coverage people neglect is temporary living expenses, Davis says. Those who lose a house in a fire still have to pay a mortgage and on top of that a rent.
“That could financially devastate a family financially,” he says. “Also, I recommend renters get insurance for what they have inside a condo.”
Eagle County Commissioner Tom Stone, a member of the Forest Advisory Board of Colorado, says most people in the county have their properties insured.
“I don’t see the lack of insurance as as a big issue here,” he says. “But I would like to see people taking defensible areas (reduce vegetation immediately adjacent to house) around their houses more seriously.”
Also, Stone recommends residents to be prepared to leave the house in a short notice.
“A lot of people in Glenwood Springs had only 15 minutes to leave their homes,” he says. “It will help if families have a plan that includes having a common location where thay can reunite if something happens.”
From the insurance perspective, Stone recommends taking a video from everything inside and outside the house.
Insurance premiums here not so high
Property insurance rates in Eagle County aren’t high, says Chris Davis of Alpine Insurance Agency.
Homeowners insurance in Eagle County is cheaper than in Denver, he says, because hail and crime have caused the main losses in the state.
Insurance for a $500,000 home in the Vail Valley costs about $900 a year. In Denver, the owners of a $400,000 home pay $1,500.
“That has to do with hail there,” Davis says. “The Hayman Fire, however, will cause an increase in insurance rates in this region.”
In the next few months, insurance companies are expected to change the way they monitor the level of precipitation especially before the snow melts, Davis says.
Other reasons for premium hikes, he adds, are the Sept. 11 terrorist attacks and the crash of technology stocks on the stock market.
“All current rates in commercial, property and auto are set to pay for current losses and to foresee future terrorism acts,” he adds.
Veronica Whitney can be reached at (970) 949-0555 ext. 454 or at vwhitney@vaildaily.com.
