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SUMMIT PARK – There are good reasons why insurance companies reject clients from their owners’ policies: non-payment, non-care of the property or too many claims.
None of this applied to Peter Ingle, who has lived in his home nestled in the woods of Summit Park for 25 years.
His neighborhood was evacuated in August 2021 when defective parts of a passing vehicle caused a fire in Parley’s Canyon near Interstate 80. The fire burned more than 500 acres.
The wildfire sparked a visit by the insurance company to homeowners in Ingle, Allstate, shortly thereafter.
“My insurance company called and said they would just go out to check the areas around our homes to make sure they were safe from fire,” Ingle said. “We haven’t thought much about it.”
In November 2021, Ingle said there was bad news: Allstate was giving up its insurance.
Ingle called his insurance agent, who assured him that he was working with Allstate to change their minds.
When February came, Ingle’s agent still had no good news.
“He says, ‘Reality is not your property, the problem is next door,'” Ingle said.
In the letter sent to Ingle by Allstate, the reason for the non-renewal was “overgrowth … on or next to your property”.
“I was crazy,” Ingle said.
Ingle said he has been careful for 25 years to make sure his yard has a protected space by keeping the trees neatly trimmed and away from the house. Unlike his neighbors, he even had a lawn.
He said he had never been given the opportunity to solve problems with neighboring properties. Instead, when his policy at Allstate expired in April, he was forced to find a new policy with another company. Fortunately, his new policy had the same coverage and was a little cheaper than Allstate.
Large fires are a big risk for insurance companies
We contacted Allstate on behalf of Ingle. In an email, their spokesman told us, “because we protect customers and their privacy, we do not share specific policy information and decisions.”
We also offered to get written permission from Ingle to talk about his situation, but we did not receive a response.
Instead, we took Ingle’s situation to Carol Walker, executive director of the Rocky Mountain Insurance Information Association. Walker said Allstate had done nothing against the rules.
“Each insurance company will consider this individual property risk from forest fires and decide if it is a risk it can take,” she said.
The risk of fire in much of the Intermountain West is no longer limited to remote forest huts. As the drought deepens and homes expand in the wild-land interface, more and more Utah residents find themselves living in high-risk areas.
Wasatch Front is not a refuge from this risk. According to RiskFactor.com, 87% of all properties in Utah – more than a million homes – are at some risk of wildfires over the next 30 years.
Looking at the Utah Forest Fire Risk Assessment Map from the Utah Department of Forestry, Fire and State, places like Cedar City, Lehi, Riverton, communities for all the mountains and even parts of the Great Salt Lake shoreline in North Salt Lake has an “extreme” risk of forest fires.
This risk could affect the ability of thousands of Utah residents to obtain homeowners’ insurance.
“It will take more shopping for insurance,” Walker said. “You may not keep the insurance you always had, especially if you are in a higher risk area.
The case in California
The failure of insurance companies to leave the market is something that is already happening in California, a state affected by deadly, catastrophic fires in recent years.
“Could this happen in states like Utah?” “Yes,” Walker said.
After Camp Fire destroyed nearly 20,000 homes in 2018 and killed hundreds in Paradise, California, residents across the state in high-risk areas turned out to receive letters like Ingle’s telling them that insurance their terminated.
According to the California Insurance Commission, nearly 100,000 homeowners have seen their policies not renewed in 2019, a 70% increase over the previous year.
The California government has decided to act and in 2018 created a one-year moratorium on insurance companies that cancel or do not renew insurance policies in areas at high risk of forest fires. This came into force at the end of 2019 with the declaration of the state of emergency. Commissioner Ricardo Lara has extended this moratorium every year since.
Following this moratorium, California saw a 19.8% drop in non-renewals in zip codes affected by this moratorium.
The Utah Insurance Commission does not track how many Utahs have been excluded from insurance, so it is not clear how often this has happened in our state.
California is one of 32 states and Washington, D.C., that offer state-funded insurance plans to people in areas at high risk of severe weather and natural disasters. Utah is not one of them.
Walker warned that the steps taken by California may not be the best idea, as many insurance companies have withdrawn completely from their market.
“Insurance companies are liable to all their policyholders, regardless of the type of risk you live in,” Walker explained. “They need to be able to take enough bonuses to pay claims when we have thousands of homes burned down, when we have big catastrophic events that we see more and more.”
However, depending on how bad the years of wildfires are, Walker acknowledged that Utah may need to create a state-funded insurance plan to help people in high-risk areas.
Protect your home from the dangers of forest fires
The Utah Department of Forestry, Fire, and State Lands has advice on what homeowners can do to reduce the risk of forest fires.
You can see these tips, along with explanations of how homes burn in forest fires, by visiting their brochure here.