Third session in Coconino County's wildfire insurance series brings cautious optimism

The Coconino County Board of Supervisors hosted its third discussion in the "Wildfire Insurance Crisis" series on Tuesday, Sept. 30, and the two-hour conversation provided some clarity into how future construction in the county might be aligned with best practices for wildfire risk reduction and how those practices and new data could change insurance pricing.

But it also made clear there is not yet a path to guaranteed insurability or lower premiums for existing homes and neighborhoods.

Overall, the discussion left some of the board feeling slightly encouraged -- though still acutely aware of the challenges remaining.

"This is science-backed and apparently kind of insurer-recognized information that we received today," District 3 Supervisor Tammy Ontiveros said near the conclusion. "And maybe that's my reason for optimism, that maybe we actually have something to shoot for here."

The session began with a presentation by Michael Newman, general counsel for the Insurance Institute for Business and Home Safety (IBHS).

Newman's 30-minute presentation covered what has quickly become familiar ground: research-based recommendations for making homes or neighborhoods more resistant to ignition, such as clearing flammable materials within 5 feet of a house, covering vents with fine-wire mesh, and installing fire-resistant roofing or siding.

Newman also explained that, in certain states, homeowners may apply for a "Wildfire-Prepared Home" designation through IBHS.

That designation, however, is not yet available in Arizona. But risk reduction measures can still make an individual property more "attractive" to insurers, according to Newman.

It was an informative presentation (if slightly repetitious of earlier sessions), but in follow-up questions, some of the board expressed frustration over the apparent gap between homeowners' efforts and insurers' responses.

"At the beginning of your presentation, you talked about how the mitigation can make it attractive to an insurer but does not necessarily mean it's going to be insured," Ontiveros said. "And I think that is kind of what the problem has been, is that we've been trying to make it attractive -- in some ways, I feel like we've almost been throwing the kitchen sink at things -- and we still have insurers cancelling policies or raising rates so high, as you know, that it makes it … an effective cancellation."

District 1 Supervisor and board chair Patrice Horstman echoed Ontiveros' sentiment in a later comment with Newman. It's a challenge to persuade the community to undertake home renovations or add to the cost of building a new home without a reciprocal commitment from the insurance industry, she explained.

"We then need to know that when we do this, when we work together to do this, that it is going to produce the results we're all looking for, and that is to have insurability and premiums we can afford," Horstman said.

In reply, Newman said, "Reducing risk is always a good idea for your community. … Hopefully, the insurability will come along as well."

District 5 Supervisor Lena Fowler asked Newman if homeowners in states where the IBHS home-designation program is in use had seen actual reductions in their insurance premiums. The program's rollout was too recent to answer that with confidence, Newman replied.

Seeking transparency

Following the IBHS presentation and questions, Flagstaff Fire Department Wildland Fire Battalion Chief Paul Oltrogge spoke to the board about a multistate project to standardize and coordinate the collection of data related to homes in the wildland-urban interface (WUI).

The project has brought together representatives of fire departments, state regulators and the insurance industry. The ultimate goal, he explained, is to build a "WUI data commons." Insurers have agreed to use that data commons as the basis for their pricing decisions -- a move that would significantly increase transparency around premiums.

"That's a lot of what we're working on, is building a system that's going to inform the insurance industry on how to better price risk at the community and neighborhood level," Oltrogge said.

And along with that, the group is hoping to get industry recognition of the IBHS "Wildfire-Prepared Home" designation or some other publicly available standard for homes in wildfire-prone areas and the WUI.

Agreement upon both the data beneath decisions and the standard for mitigation could, eventually, offer homeowners a much clearer idea of the reason for their rates.

Oltrogge mentioned that the group believes it's unsustainable to force insurers to provide coverage without reducing risk. He also asserted that state-run homeowners' insurance plans -- known as "Fair Access to Insurance Requirements" or FAIR plans and commonly referred to as insurers of last resort -- place an unsustainable burden of risk on state governments.

"We're forging a little bit of a new path," he said of the group's work.

And he added, "We don't want to try to legislate the symptom, not the problem."

'Keep forging ahead'

Coconino County's Community Development director Jay Christelman addressed the board next, discussing how future home-building could be aligned with IBHS or similar standards.

The county already has an ordinance requiring new subdivisions to be built to the "Firewise USA" standards promulgated by the National Fire Protection Association, Christelman said.

"The challenge there is that most homes built in the county aren't built in a subdivision," he continued. "They're built in a lot-split area. So those elements don't apply."

New builds, broadly speaking, are having fewer issues with acquiring or maintaining insurance, Christelman said, and the county is planning an update of its building code next year that might incorporate some elements of the IBHS "Wildfire-Prepared" standard. But, he noted, "There's only so much that the building codes can help existing homes."

Building to a higher standard of fire resistance will also increase the cost of new construction, Christelman acknowledged. Just how much is "widely variable," he said, and the county is considering a "tiered approach" to its code requirements based on a home's specific exposure to fire threats.

Much like Oltrogge's presentation, Christelman's suggested that in the relatively near future there could be a county- or state-level set of broadly accepted mitigation measures homebuilders can use to make a new home insurable. That was Ontiveros' "reason for optimism."

"I feel like we're going somewhere now," she said. "I'm not sure where, but I just feel like we're kind of starting to go in the right direction."

Still, much uncertainty remains -- especially for owners of existing homes who still can't be certain that improving their home's safety or defensibility will convince insurers to come to the table with a reasonable offer.

"These aren't simple times, and this is not a simple issue," Flood Control District director Lucinda Andreani said near the conclusion of the conversation. "We just need to keep forging ahead."

County Manager Andy Bertelsen thanked Oltrogge and Christelman for their presentations and expressed his appreciation for having "local experts and professionals that are capable of tackling this issue from a local level."

And Horstman ended the discussion as she began it: with a regretful acknowledgement that the county can't do more on its own right away.

"We wish we had a, quite frankly, more simple solution and a more immediate solution," Horstman said, "because I know it's affecting our homeowners now."

The full recording of the discussion is available at youtube.com/@coconinocounty.