Wildfire risk is rising. Idaho tries to keep home insurance from going up in smoke

Though the West has seen more, longer and hotter wildfires in recent years, Idaho has managed to minimize the number of homes and structures that burn down. Last year, while visiting communities in the aftermath of wildfires, one official was struck by the number of close calls.

“It was rather amazing we didn’t lose more homes,” said Dean Cameron, the director of the state’s Department of Insurance. “You go out on the site and everywhere but the home is charred black.”

He credited homeowners’ decisions to upgrade their landscaping and home designs to be more fire-safe, as well as firefighters’ “sheer willpower.”

But property insurance carriers see the writing on the wall. Insurers tell Cameron that Idaho is “just one firestorm away from this taking out, wiping out a whole community,” he told the Idaho Statesman. He agrees.

As a result, some home insurance companies are raising premiums, adjusting what kinds of properties they will cover, and avoiding writing new policies in some areas of the state because of the wildfire risk, according to a late-April news release from his department.

In 2023, there were 91 property insurance companies operating in Idaho, according to the release. As of April, about 25 of those had chosen not to renew some or all of their policies, partially due to wildfire concerns, according to the release.

It’s an acceleration of an existing problem: From 2021 to 2023, Idaho’s home insurance premiums increased by 46%, the fourth-fastest rate in the country, according to a report by insurance agency Policygenius, which chalked the rate hikes up to the state’s increasing wildfire risk and rising home replacement costs.

Cameron said he has few firm numbers on how many companies have pulled back, or which approaches they have taken.

The department has announced a “data call” to insurers operating in the state, asking them to submit detailed information about how they are calculating their rates and deciding where — or where not — to insure. The information from that call, Cameron said, would help to quantify what the department is hearing anecdotally through conversations with insurers and customers.

Cameron said “there may be” a carrier that has fully stopped selling in Idaho, but his department is mostly seeing carriers limiting their coverage in or pulling out of certain wildfire-prone areas, including Boise County just north of Ada County, Kootenai County in North Idaho and Blaine County in Central Idaho. But he wouldn’t be surprised, he said, to learn that there were carriers avoiding Payette County just north of Canyon County, or Valley County, home of McCall. Even in Ada County, he’s heard complaints from consumers seeing large rate hikes, especially in East Boise.

As of May, the average cost of homeowners insurance in Idaho was about $1,400 per year, according to Nerd Wallet, a personal finance company.

Cameron said it’s hard to compare one homeowner’s cost with another’s because insurance premiums are informed by many factors, Cameron said. Property value and steps taken to mitigate burn damage — such as xeriscaping or avoidance of wooden roof shingles — factor in along with wildfire risk.

In some cases, a homeowner may be able to access insurance but isn’t able to sell the home because insurers don’t want to write a new policy in that area, Cameron said. In other cases, coverage may still be available, but the cost of a premium has skyrocketed from one year to the next.

Idaho takes ‘friendlier approach’ to insurance companies

Cameron said Idaho is better-positioned than other Western states to manage insurance companies’ trepidation about rising risk. Idaho has taken a “friendlier approach” to coaxing insurers to keep operating in the state, acknowledging that they need to make a profit, he said. States with stricter regulations, such as California, have seen more insurers leave, Cameron said.

In the meantime, the department is putting its faith in homeowners’ ability to harden their defenses against wildfire. Last year, Cameron’s department hosted a demonstration, burning two nearly identical homes side by side to illustrate the power of removing fuels such as plants and wooden fences near the home. The more traditional home burned to the ground in minutes; the upgraded home was barely singed.

Hurricane-prone states in the Southeast have had success creating “mitigation funds” to help homeowners pay for upgrades — and they saw insurers respond by dropping rates, even as the number of storms increased.

Cameron said he pushed for Idaho to pay for a mitigation fund to help homeowners make upgrades, but a bill to create a fund died in the Legislature during this year’s session, in part because “there is a general belief that this is just a rich-people-that-live-in-wildland-interface problem.”

“That’s not the case,” he said. “It is a problem for everybody.”

Seeing big insurance hikes? Let insurance department know

Consumers facing a lack of coverage or a major rate increase can contact the Department of Insurance’s consumer affairs section at (208) 334-4250, by email at [email protected], or through an online complaint form at https://doi.idaho.gov/.

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