NM asks for extension of nation’s largest wildfire mitigation program

New Mexico's superintendent of insurance said Thursday she hopes the Legislature will continue its support of a $10 million wildfire mitigation program for homes at extremely high wildfire risk, a program she said is becoming a national model to address rising homeowners' insurance rates and cancellations.

The Legislature gave $10 million to the Office of the Superintendent of Insurance during the session in January for grants to homeowners who live in increasingly wildfire-prone areas. The grants help owners who have "Fair Access to Insurance Requirements" plans, or FAIR plans, pay for wildfire mitigation measures.

The state's FAIR plan increasingly provides the only option for homeowners in wildfire-prone areas. Known as the "insurer of last resort," the plans only become available to home and property owners if they've been denied coverage in the private market.

Lawmakers approved the $10 million in grants this year to help FAIR plan recipients avoid losing their homes to wildfire, but the funding expires June 30, according to the state budget.

Insurance Superintendent Alice Kane told the Legislative Finance Committee on Thursday that she is asking the Legislature to re-authorize and extend the funding, because the program shows promise and could become a national model with more time. She also said the program ranks as the largest of its kind in terms of the amount of financial support available.

"We think the whole country is looking at us as being a leader in this wildfire mitigation program," she said.

As of Thursday, she said 28 Otero County homeowners with the FAIR Plan were slated to receive $7,000 grants from the fund as part of a "pilot program" to fireproof their roofs in line with the highest standards of the Insurance Institute for Business and Home Safety, a nonprofit research and testing organization that seeks to reduce property damage from natural disasters.

Kane said she hopes those roofs will all be completed by spring, and then the office will have tested a grant program that could benefit as many as 1,400 FAIR plan holders.

"We're hoping that the pilot program will be not just operational, but done by the first quarter this year, so we can show the Legislature that the money is being used," she said.

Across the state, homeowner and other property insurance premiums have sharply increased, and insurers have refused to renew or even canceled policies in some areas, particularly the burn scars of the recent South Fork, Salt and Hermits Peak-Calf Canyon fires.

In the private market, New Mexico's 10 biggest insurers have increased premiums on average 50% to 60% since 2022, the chief OSI actuary has said.