Out-of-state fires, loss of local fire resources threaten Wyoming homeowners insurance

CHEYENNE — Out-of-state wildfires and a potential loss of firefighting resources could impact homeowners insurance rates in Wyoming.

This is in line with a national trend of increasing insurance rates, said Jeffrey Rude, insurance commissioner of the Wyoming Department of Insurance.

"Obviously, costs are going up for all home insurance, and wildfire makes it even go up more if you're in one of those areas that have been rated as a fire risk," Rude said.

Before the devastating January fires in Los Angeles, homeowners in California were subjected to higher rates and, in some cases, a complete loss of coverage. This proved to be devastating for many after the fires engulfed thousands of homes.

California isn't the only state facing these issues. Increasingly, homeowners in states with high fire risks, like Wyoming, are facing a loss of coverage or higher insurance rates.

Rates aren't only increasing due to the increase of wildfires, however. They're also increasing as companies begin to evaluate properties using new predictive models, Rude said.

"We've had complaints in this area, (people asking) 'Why did my rates go up because of the wildfire? I've never had that happen before," Rude said. "That's because they're using this predictive modeling to show where they're more concerned with that risk."

The Wyoming Department of Insurance estimates that there are roughly 90 companies that are licensed to write policies for homeowners in Wyoming. The issue for Wyoming homeowners isn't the number of available providers; according to Rude, the bigger issue is increasing costs.

Local fires, fire resources and mitigation efforts aren't the only factors insurance companies have to account for; out-of-state fires also indirectly impact rates for Wyomingites.

"We have these big out-of-state fires, and they indirectly impact the markets in other states," Rude said. "These devastating fires in California are going to drive up the cost of lumber, concrete, labor and everything that involves a rebuild. And so the cost of rebuilding the home goes up, and they go up across state lines, and that increases the cost of insurance."

In Wyoming, fire losses accounted for over $2 million worth of damage in 2021.

This is only one of many factors that will increase homeowners insurance, and the costs have not gone unnoticed by local communities.

Shad Cooper, president of the Wyoming Fire Advisory Board and the Sublette County fire warden, noted that homeowners in his county have called him increasingly over the past five years for guidance on how to protect their homes after being contacted by their insurance companies.

"Many local homeowners that have contacted me over the last few years have said that their insurance company has contacted them and asked them to take steps to increase their resiliency, harden their homes and reduce hazardous fuels around their homes," Cooper said.

In Cooper's experience, insurance companies are concerned about the materials a home is made of and the available water sources near a home.

Companies also look at the proximity of fire stations to the property, which may become an increased concern should the Wyoming Legislature cut property taxes without providing backfill funds for first responders. Some fire districts have warned they will be forced to lay off firefighters and close stations if additional property tax cuts are passed without that backfill.

The uncertainty of funding has put local responders in a precarious position. Local departments may not be able to get to homes as quickly, decreasing their ability to control fires quickly in the upcoming year.

"They've expressed serious concerns about their ability to even put fuel in their fire trucks," Cooper said. "There's a lot of fire departments in the state that are primarily volunteer fire departments that are doing all they can to scrape and make ends meet on what little budget they have."

Every fire department in the state receives funding from property taxes, Cooper said, and they still find themselves throwing pancake suppers or various fundraising events to afford personal protective equipment (PPE), structural firefighting equipment or even fire trucks.

Despite the risks to first responders and public safety, there's still a clear call for reduced property taxes in the community.

"Nobody wants to see a fire department close its doors because they can't afford to put fuel in the fire trucks anymore," Cooper said. "... That's the worst-case scenario. We're trying to work with our legislators to provide some sort of a solution that provides property tax relief, but doesn't reduce services that we provide."

This past fire season, local fire responders throughout the state and the Wyoming State Forestry Department said they were incredibly proud of their ability to respond to over 2,000 reported fires without losing a single life and fewer than five residential homes, according to State Forester Kelly Norris.

That same success may not be achievable in future fire seasons, should local departments lose funding and federal partners also lose their resources.

"It's a big deal losing any firefighting resources because we just don't have enough," Norris said. "That happened this last summer, and we depended very much on resources from across the United States, from all of our partners, federal (and local)."

The vast majority of firefighting resources in Wyoming are within counties, Norris said. The state provides some vehicles; however, they are unable to staff them.

"We don't have firefighting staff, so when it comes to who's going to respond? It's definitely our fire districts," Norris said. "Our local fire jurisdictional districts have been supporting wildland fire in that kind of capacity for as long as I think Wyoming's been around."

Despite uncertainty regarding funding in the Legislature and uncertainty with federal partners as the hiring freeze continues, Norris and many local firefighters have reiterated that they will continue to do their jobs; it just may be slower and with fewer resources.

"We just don't know where things are going to land legislatively here. I don't know where things are going to land federally, but we're going to do the job," Norris said. "We're going to move forward, we're going to protect lives, we're going to put fires out, and we're going to figure it out; that's our job."

While it's hard to say how each insurance policy will be affected by a loss of local fire resources, some impact should be expected.

"It's hard for me to say definitively, just because I don't get to see how they prioritize the factors that go into their rates," Rude said. "But it certainly makes sense that when someone has fewer resources available to fight a fire, those insuring against those fires will probably charge you more."