Wildfire risk drives New Mexico home insurance prices to record highs [The Santa Fe New Mexican] – InsuranceNewsNet

July 25 – All the smoke and fire from year to year adds up New Mexico has the 13th highest home insurance rates in the nation, a new study by QuoteWizard shows.

The remaining 12 are all Tornado Alley or main hurricane area.

“This is directly related to forest fires [in New Mexico],” said Nick WinZantsenior analyst at QuoteWizard, an online insurance comparison platform.

Everything has been much more expensive everywhere in the past year – except for home insurance. Some places fall right in line with the “more expensive” home insurance, such as New Mexicobut QuoteWizard found that 17 states had lower home insurance rates in 2022 than in 2021.

“Home insurance has become location specific,” VinZant said.

The highest home insurances are in the neighboring ones Oklahoma and Texas and nearby Kansas and Nebraskaall average more than 3000 dollars annually. QuoteWizard mediocre New Mexico at 2071 dollars for 2022, a 13 percent increase over 2021 — the fifth-highest percentage increase after Idaho, South Carolina, Missouri and Kansas.

VinZant also discovered New Mexico had the eighth largest spread between the cheapest policy in 1600 dollars and most expensive at 3100 dollars for a certain policy.

“We see a huge range in price for the exact same coverage,” VinZant said. “It’s worth shopping around.”

Jerry Gomez I didn’t think I would spend time on such things. But that was before Hermits/Calf Peak Canyon Fire destroyed his 2,400-square-foot home he built 20 years ago Spray20 miles north of Las Vegas, New Mexico

Gomez paid 3300 dollars for 250,000 dollars of coverage.

Gomez is now building a smaller 720-square-foot house to last until he can rebuild a larger home. He expects a full rebuild to cost $550,000.

“I’m not going to get what I lost because I didn’t have replacement costs,” Gomez said. “A lot of times we don’t pay attention. I didn’t know half of this stuff. This is one of those things. I blame myself. If the government steps in and helps us, I think we’re going to be fine.”

Mount Hermits/Pelec Canyon Fire was simply a continuation of decades of devastating fires in the New Mexico. VinZant said New Mexico has seen a 163 percent increase in natural disasters over the past 20 years and 10 cases of 1 billion dollars– plus forest fire losses over the past 40 years.

“Now New Mexico is starting to increase at a faster rate than other states,” VanZint said.

And these increases are felt even in areas that don’t face the forest.

Berta Salazar her annual home insurance premium rises from 1085 dollars to 1300 dollars over the past three years as the appraisal of her two-story, three-bedroom, two-bathroom 2,059-square-foot home in Santa Fe became from $229,000 to $465,000.

She remembers six years ago her home insurance was only 700 dollars a year ago, but she didn’t realize she was underinsured with a 150,000 dollars politics.

“At the time, the insurance company didn’t explain to me that I had to have enough insurance,” Salazar said.

But experts say wildfires are a key component of home insurance, especially in Santa Fe.

CoreLogic ranked 2019 Santa Fe at number 12 among the 15 largest metropolitan areas for fire risks based on reconstruction costs. Eight of the first nine were included California with Denver; Colorado Springs, Colorado; and San Antonio, Texasthe only other cities ahead of them Santa Fe.

Bozeman, Mont.based Headwaters Economics in a July report on wood roofs in areas at risk of wildfires found that Santa Fe County the wildfire risk is over 90 percent US counties. But Santa Fe County and Northern New Mexico counties did not make the nonprofit’s list of counties at medium to very high risk for wildfires with an abundance of wood canopies such as San Juan, Grantmiss anna Otero and Chavez counties.

The casual observer would think that wildfires are confined to the foothills – and indeed, Santa Fe Fire Department rates them as extreme and very high wildfire risks, in part because they often have only one entrance and one exit for traffic and fire engines. The city center does not receive a rating but is also vulnerable, with all the massifs and undeveloped properties flooded with flammable vegetation, said Nathan Millerwildlife warden in Santa Fe Fire Department.

“The whole city of Santa Fe is an urban interface in the wild,” Miller said. “All citizens of Santa Fe we have to be vigilant about wildfires.”

Vigilance means clearing vegetation within 30 feet of homes, keeping shrubs and trees trimmed “and keeping anything from going over the houses,” Miller said.

The December 30, 2021, Marshall Fire in Colorado it was chilling proof that communities don’t have to be in forests or on hills to burn quickly. Boulder suburbs Louisville and Superb are plain cities in grasslands. In just 24 hours, the most destructive fire in Colorado the story destroyed or damaged more than 1,000 homes and more than 30 commercial structures there.

“You can’t buy a policy for cash value New Mexico,” said Carol Walkerexecutive director of Rocky Mountain Insurance Association. “You can only purchase a replacement cost policy.”

Construction spending increased about 17 percent in the past year and about 26 percent the year before, according to Associated General Contractors of America. The US Census Bureau reported a nearly 50 percent increase in construction costs since 2016 from approx 1.2 billion dollars to 1.8 billion dollars.

Wildfire isn’t the only home wrecker in the New MexicoWalker noted.

New Mexico is a hail-prone state,” she said. “Hail can cause more damage than a wildfire.”

Home insurance is not regulated by the state, nor is health insurance.

“It’s a competitive market,” he said Jennifer Catechisdeputy head of New Mexico Chief’s office of insurance, state agency. “We don’t set their rates. We can check with insurers to make sure they are honoring policies accurately. It is an intermediary between the insurer and the insured.”

The agency’s typical involvement with home insurance companies follows consumer complaints filed with the office.

“There is no significant jump [in complaints]Catechis said.

What there has been is some denial of coverage in foothill communities. But Catechis and Walker insist coverage is available everywhere Santa Fe.

New Mexico not in the same boat as California still,” Walker said. “It’s still widely available in the New Mexico. There may need to be wildfire mitigation requirements to get insurance. You may have to shop it around. You’ll probably pay more for it.”

“Someone didn’t shop around,” Catechis said of the hypothetical of not finding insurance in the Santa Fe. “Another insurer would write a policy. Users can try shopping around a bit. See if another insurer will cover them. If they can’t get coverage, they can turn to New Mexico [Fair Access to Insurance Program]. The stipulation is that FAIR will not underwrite policy 250,000 dollars.”

FAIR was enacted by the Legislature in 1969 to provide property insurance to property owners who could not secure policies in the normal market. FAIR is underwritten by the New Mexico Property Insurance Program.

Home insurance can come with “sticker shock,” but Walker tries to put policy costs into context.

“Insurance is not a big part of buying a home,” she said.


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