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The Rough Notes Company Inc.



October 03
09:26 2018


Carrier offers wildfire defense service

Over the past few years, national attention has been directed toward the destructive effects of wildfires. Wildfires are a growing crisis and continue to cause significant damage. The latest statistics from the National Interagency Fire Center illustrate the scope of the problem; in 2017, for example, more than 56,000 wildfires burned over 9 million acres of land. These fires also resulted in the destruction of 12,306 buildings, of which over 8,000 were homes. These numbers continue to grow each year.

Taking the initiative to help policyholders monitor and protect their homes from wildfire and mitigate damage is Chubb Personal Risk Services. Its Wildfire Defense Services program is offered free of charge to eligible policyholders who own free-standing single-family homes in 18 wildfire-prone states: Arizona, California, Colorado, Idaho, Montana, Maryland, New Mexico, Nevada, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Texas, Utah, Washington and Wyoming.

If we can work with our insureds and motivate them to implement a few simple preventive measures, the overall protection of their property will be enhanced.”

—Kevin Fuhriman
Risk Consulting Catastrophe Manager
Chubb Personal Risk Services

Kevin Fuhriman, risk consulting catastrophe manager for Chubb Personal Risk Services, says that to design the program, his firm partnered with Wildfire Defense Systems, Inc. (WDS), a wildfire management organization headquartered in Bozeman, Montana. WDS employs federally trained professionals who can respond on the carrier’s behalf.

In the event of an encroaching wildfire, WDS may initiate precautionary measures on behalf of the insured, such as installing temporary sprinklers around the perimeter of the residence, removing combustible items and dead or dying tree limbs, and applying a non-damaging fire-retardant gel to the house and landscaping.

If a specific threat of wildfire exists in the area, recorded messages will alert the policyholder that the service provider is monitoring the situation. If the threat of fire becomes imminent, timely updates will be provided.

The program “does not replace the emergency services provided by local, state or federal responders,” Fuhriman emphasizes. Under no circumstances should we be considered first responders. We maintain an advisory role only.”

Educational element

A key element of the program is educating policyholders about wildfire prevention and mitigation. Statistics from the U.S. Department of the Interior indicate that up to 90% of the wildfires in the United States are caused by humans. Some of these fires result from campfires left unattended, the burning of debris, and negligently discarding cigarettes, as well as intentional acts of arson. The remaining 10% are caused by lightning strikes.

“We realized early that education would be a key program component,” Fuhriman says. “We have co-sponsored educational efforts with our agents and brokers. This allows them a chance to interact directly with their policyholders.” Typically invitations are extended to the community at large, giving agents an effective, low-key sales tool to promote their firms’ capabilities. Educational opportunities also are offered to smaller groups like neighborhoods or home owner associations. The events usually begin with a presentation about wildfires in general; when appropriate, specific local data also is presented.

When a new Masterpiece homeowners policy is written in one of the 18 states, Chubb sends a risk consultant to discuss the insured’s wildfire exposure and offer suggestions on actions he or she can take to mitigate the exposure. If a major exposure is found to exist, Chubb also may have its wildfire team visit the site. “There is only so much an individual property owner can do; it can sometimes overwhelm the owner,” says Fuhriman. “If we can work with our insureds and motivate them to implement a few simple preventive measures, the overall protection of their property will be enhanced.”

He points out that a basic understanding of wildfires is helpful for policyholders. “Fire will always find the weakest link to a property,” he explains. This dynamic heightens the risk of fire spreading when houses are close together. “You definitely do not want to be the weakest link,” he asserts. Fires are going to happen, “but if community members work together, they can greatly reduce the chance of a structure-to-structure event.”

A common misconception

Even among people who live in wildfire-prone areas, Fuhriman observes, a common misconception is that the local fire department will save their homes. Although fire departments that are familiar with wildfires do an excellent job, he says, the home owner must understand that he or she has some “skin in the game.” When having a new house built, the home owner needs to be wise in selecting construction and landscaping materials. Over time, they need to make sure to remove leaves, branches, and other fuel sources from the property.

The public fire protection system simply does not have the resources to protect every property. Fuhriman points out that resources are directed at structures that have the best chance to survive. Chubb’s goal, he says, is to make certain that its policyholders’ dwellings are the ones that are selected. “We want each policyholder’s property to have a better than average chance to survive.”

As wildfire activity increases in frequency and severity, more stringent building codes are being developed in many communities and construction materials are being modified to more effectively withstand the ember storms that precede and follow a fire.

These efforts are becoming increasingly important because rising temperatures are contributing to larger, more destructive blazes and also are resulting in dryer, more combustible vegetation. More frequent lightning strikes and more intense winds also are being observed. Wildfires are a major threat not only to western states but also to states in other parts of the country.

The author

Michael J. Moody, MBA, ARM, is the retired managing director of Strategic Risk Financing, Inc. (SuRF), a firm that was established to provide consulting services to captive and other alternative risk transfer mechanisms.


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