Insurance Ready in

the WUI

Pikes Peak Wildfire Prevention Partners

March 27, 2015

Wildfire Insurance Lessons Learned

Insurance Lessons Learned from Waldo & Black Forest Recoveries

Sharing the Critical Importance of Insurance Preparedness Prior to Wildfires or any Natural

Catastrophe

Colorado Springs Together – Our Laboratory

WUI & PUIWildland Urban Interface (WUI)

Prairie Urban Interface (PUI)

Where Humankind Meets the Wild – living in the Trees, in the open Range, etc

Increased Exposure to Wildfire

Why the WUI/PUI matters?

Increased Development in the WUI

Recent Increases in CO Wildfires

Waldo Canyon & Black Forest

How Should We Face This Increased Risk?

Today’s Objectives

New Natural Catastrophe Realities

Insurance Preparedness

Catastrophe Preparedness

New Natural Catastrophe Realities

El Paso County Wildfires

Waldo Canyon Wildfire

Second Most Destructive CO Wildfire

Two Residents Killed

347 Houses Totally Burned

Many Partial Smoke and Heat Claims

Aftermath

Waldo Stats18,247 Acres

Declared 100% Contained July 10, 2012

8th Largest Wildfire in US History

Most Costly in CO - $460M

5th Worst Natural Disaster in CO

Black Forest Fire StatsDuration: June 11-20, 2013

Human Caused

14,280 Acres Burned

2 Deaths

488 Homes Destroyed – Most Destructive

$420M Estimated Damages

Similar.. But…DifferentWaldo Canyon

Residences in Two Square Miles

Suburban – 15-25 years

City of Colorado Springs

Recovery Led Private Sector

Black Forest

Residences in 23 Square Miles

Rural – Wide Class Range

Unincorporated El Paso Cty

Recovery: Public & Private

Wildfires: New CO Normal

Predicted to Increase

More People and Houses in WUI

Colorado: Major National WUI Exposure

Colo Spgs Wildfire Risk

8th Most at Wildfire Risk in US

14,900 Homes in Highest Risk Category

$4.4 Billion – Reconstruction Cost

Source: 2015 Wildfire Hazard Risk ReportCoreLogic

Wildfires In “Cat” Context

Colorado Catastrophes

2009 Most Costly Severe Weather Season:$1.4 billion in insured losses

July 2009 Hail Most Expensive Insured Disaster: $767.6 million.

2012 Waldo Canyon Fire: $466.7 million(2014 dollars)

2013 Black Forest Fire: $426.3 million(2014 dollars)

“Cat” Insurance Impact

HO Insurance Premiums Rising

Higher Claim Frequency & Severity Trends

Higher Building Costs / Larger, More Complex Homes

CO Ranked #2 in “Cat” Claims (2009-2013)

Recovery - # Permits

Mountain Shadow Permits: 288 (83%)

Black Forest Permits: 271 (56%)

March 2015

Insurance Preparedness

Insurance Purchase Paradigm

Do You Buy Protection?

or

Do You Buy Low Cost?

Replacement Costs

General Rule: TOO LOW

Review Current Rebuild Costs

Review Add’l Structures Costs

Report Structure Updates

Annual Reviews

Review Replacement Costs

Periodic Reviews

Include Recent Additions

Local Building Costs

Unusual Rebuilding Needs

Replacement Costs

How Can You Be Sure?

Compare Multiple Replacement Estimates

Check With Builder for “Rebuild or Reconstruction Costs”

Review Policy Limits

Does Your Policy Include at Least 20% Extended Replacement Cost Coverage

Does Your Policy Include Law & Ordinance (Building Code) Coverage?

Does Your Policy Provide Up to Two Years Additional Living Expense (ALE)

Required By CO HO Reform Act of 2013

Contents CoverageDoes the Automatic Limit Adequately Cover

You?

Review the Special Contents Limits

Schedule Antiques, Fine Arts, & Collectibles

Schedule Firearms, Jewelry, Computers & Other Valuables

In Home Business

Do You Run a Business from Your Home?

Will Your Homeowners Policy Cover You for Any Business Contents Losses?

Should You Consider a Separate Business Policy?

Insurance Availability

Higher Prices – Due to Recent “Cat” History

Tougher Underwriting –Mitigation

Higher Deductibles

Some Unavailability Possible

Catastrophe Preparedness

Home InventoryCreate an Inventory of Your Stuff in Home or

Apartment

Document Your Inventory – Pictures, Video, Receipts

Store Inventory and Records AWAY from Home!

Update the Inventory When You Make Major Purchases.

Inventory Assistancewww.knowyourstuff.org

NAIC: MyHome Scr.APP.book Mobile App

Insurance Company APPs/Clouds

FEMA's "Are You Ready?

I.I.I.'s "Know Your Plan" app for iPhone

PlanReduce Exposures to Loss – Mitigation

Know & Practice Evacuation Routes

Centralize Valuables Needing Evacuation

72 Hr. Disaster Kit

Back Up IT Data & Memorabilia

Stay InformedStay Informed - News & Weather

Information from Insurance Companies, RMIIA, Internet on Catastrophe Planning

www.rmiia.org/catastrophesand statistics/wildfireandinsurance.asp

Maintain Periodic Contact with Your Agent or Insurer

Community Involvement

Help a Neighbor Mitigate

Identify Opportunities to Reduce Risk

Advocate “Firewise” Communities

Support First Responders

How Insurance

Ready

Are

You?

Really?

Take AwaysBest Protection May Cost More

Preparedness Pays Dividends in Disasters

Best Time to Start is Now

Questions

Thank You

Pat Fitzgerald