Some insurers no longer sell wildfire insurance policies in Montana’s high risk zones

California wildfire damage

As fires blast their ways across western portions of the states, many providers have refused to continue selling.

Wildfire insurance policies are becoming harder to obtain in certain parts of Montana. Some insurance companies have decided to stop offering this protection in some of the zones where the fires are currently ablaze.

This is not an abnormal practice for companies selling protection such as wildfire and flood insurance.

“It’s very common for insurance policies when it comes to natural disasters, whether it be fires or floods, that insurers won’t write new policies, or won’t renew them, if properties are immediately threatened by a natural disaster,” said Montana Insurance Commissioner Matt Rosendale’s spokesperson, Kyle Schmauch.

It’s a typical practice for insurers to stop selling wildfire insurance policies within zones already affected by fires. It is similar to the practice when flood and supplemental wind insurance companies stop selling those coverages when a named storm is already headed into a region.

That said, the Commissioner’s office has found a problem with the wildfire insurance policies sale cessation.

homeowners wildfire insurance policies coverageAccording to Schmauch, the state regulator continues to operate under an effective advisory from the previous administration stating that insurers are not allowed to refuse the sale of insurance policies based on a broad geographical location. For that reason, they Montana insurance companies are not allowed to stop writing policies in all of Montana or in a particular zip code or county. Instead, the refusal should be property-specific based on its individual risk.

Schmauch explained that each insurer has its own practices when it comes to deciding on the level of risk to a property associated with a wildfire. He pointed out that if a property owner feels that they have been unjustifiably refused wildfire insurance coverage, they can contact the Insurance Commissioner’s office so it can be investigated. An investigation has already occurred in Stevensville.

In that case, the insurance company reversed its decision. In that situation, it was clear that the property that would be covered by the wildfire insurance policies “was quite far from the potential fire hazard.” Information for making a similar request for an investigation is available on the commissioner’s official website.

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