Heinrich co-sponsors bill to study wildfire impacts on home insurance

Democratic U.S. Sen. Martin Heinrich and a Republican colleague are seeking a clearer picture of how wildfires affect homeowners' access to insurance, as insurers in New Mexico and across the country increasingly cancel or refuse to renew policies.

Heinrich of New Mexico and U.S. Sen. Tim Sheehy (R-Montana) introduced the "Wildfire Insurance Coverage Study Act of 2025" last Thursday, a bill that would empower the Government Accountability Office to conduct a wide-ranging study of wildfires' effect on private insurers' behavior over the last decade.

"I'm hearing from more and more New Mexicans who've seen their insurance premiums skyrocket, lost coverage entirely or been priced out of protecting their homes. That is completely unacceptable," Heinrich stated in a news release.

The bill would require the GAO to create a detailed picture of wildfire risk across the country, as well as examine where and whether insurers' have raised rates, declined to provide coverage or pulled entirely out of certain markets. It will also examine what state interventions, if any, have worked, according to the legislation.

"Families deserve fair, transparent coverage they can count on," Heinrich stated. "We need a clearer picture of how worsening wildfires and climate risks are impacting insurance companies' decisions to raise insurance premiums."

The bill has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.

According to the state Office of the Superintendent of Insurance, which regulates and monitors insurance products offered across New Mexico, 13% of state properties are uninsured, which is the second-highest rate in the country, behind only Mississippi. An actuary at the OSI testified earlier this year that the state's top 10 insurers increased premiums 60%, on average, since 2022.

The OSI has not reported any insurers pulling out of New Mexico entirely, but said in a news release earlier this month that the state's top 10 insurers declined to renew more than 10,000 policies between Jan. 1, 2021 and July 1, 2024. The regulator observed a "significant jump" in non-renewals in 2023, a rate that remained high in 2024.

Also, a recent, first-of-its-kind study from the Federal Insurance Office examined insurance data in about 200 of New Mexico's roughly 260 ZIP codes. Among other findings, researchers discovered that in 2022 insurance companies chose not to renew insurance policies in the state at a higher rate than the national average in 152 of the 200 ZIP codes it analyzed.

In 2022, New Mexico suffered a historic wildfire season, with the two biggest-ever wildfires in state history, including the Hermits Peak-Calf Canyon in northern New Mexico and the Black in southern New Mexico. Each burned more than 300,000 acres.

Ruidoso-area lawmakers have also said homeowners have increasingly complained about premium hikes and cancellations since the South Fork and Salt fires last summer.

The federal study also found that, in 21 ZIP codes across the state, private insurers paid out more in claims and other expenses than they generated in premiums.

During the most recent legislative session, several proposals aimed at revamping the state's so-called "insurer of last resort," known as the Fair Access to Insurance Requirements plan, were considered to make it cover more people and provide more coverage. Additional proposals would have shaken up the board overseeing the FAIR plan, which is now composed of insurance industry leaders, to require it to include a climate scientist and a disaster expert, among other changes.

The legislation did not pass, but the FAIR plan board did vote to increase coverage limits from $350,000 to $750,000 for private homes and up to $1 million for commercial properties, which is in line the failed legislation.

Increasing the coverage cap to $750,000 is expected to increase the number of FAIR plan holders from about 7,000 to about 11,000, state insurance officials have said.

OSI Superintendent Alice Kane has said she is seeking additional changes to the FAIR plan, which is only offered to homeowners who have been denied coverage in the private market. Changes include increasing coverage limits for commercial property owners and also implementing requirements that FAIR plan recipients mitigate wildfire risk to their properties.

Kane will provide additional updates to an interim legislative committee Wednesday in Los Alamos at 12:45 p.m. Kendra Zacharias, the chair of the FAIR plan board, is tentatively expected to join her, according to a meeting agenda.