Fire insurance costs remain steady regardless of payouts

insurance industry fire insurance

Though there have been a large number of payments required due to wildfires, costs are level.

Wildfires have been an immensely destructive force throughout the American West in 2013, and while fire insurance payments have been considerable, it still looks as though the costs in this sector will remain steady.

The latest predictions are that this will be yet another year of payments in the hundreds of millions of dollars.

The losses are predicted to be in the hundreds of millions from the wildfires this year, leading to yet another long season of fire insurance payouts. Homeowners had already lost their homes due to last year’s season and are now seeing the damage replace itself as yet another bad year proves itself.

fire insuranceLast summer’s fire insurance claims in Colorado included the leveling of hundreds of homes.

In 2012, the Waldo Canyon wildfire became the most destructive that the state had ever experienced. The blaze took down 346 homes in the area and led to millions upon millions in fire insurance claim payouts. Once the homes started to burn, they went up very quickly and often exploded, leaving them entirely incinerated, instead of merely being torched.

Now, a year later, at a time when the reconstruction using the money from the fire insurance payouts is still underway, the residents of the area have nerves on edge as the wildfire season is well underway. Most of what was burned has now been replaced, in terms of the buildings. Now, it is primarily the added structures, such as decks, that are being constructed.

However, while the rebuilding continues, the wildfire risk does, as well. Area homes are now considered to be at high risk. However, despite this fact, the cost of fire insurance is remaining steady. The reason is that for insurers, wildfires are not considered to be as large of an issue as other natural disaster events such as hurricanes or tornadoes. This is even true in the case of Colorado, where the problem is rampant.

In fact, in Colorado, hail is more of an issue than wildfires and generates considerably more cost. This has allowed fire insurance to be maintained by residents without massive increases in their rates.

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.