Beetle issue to have an impact on insurance rates

SUMMIT COUNTY - Local homeowners shouldn't expect any drop in their insurance rates based on wildfire mitigation efforts in the local area. At best, insurance rates could remain stable; in a worst-case scenario, insurance companies could deny coverage based on the wildfire risk to a particular property.

That holds true even in the face of significant community wide projects intended to reduce the threat of a catastrophic blaze. At this week's meeting of the local pine beetle task force, Summit County special projects planner Steve Hill pointed out that current work should soon result in a large fire break between Farmer's Korner and the County Commons.

"Will there be a reduction in rates?" Hill asked.

"No, not really, you're expected to protect your property. You risk losing your coverage if you don't," said Carole Walker, director of the Rocky Mountain Insurance Information Association at the meeting.

The insurance is industry is trying to play a partnership role in keeping Colorado communities safe, and supports increased ordinances and beefed-up building codes aimed at lessening fire risks, Walker said.

"People often do something because of their pocketbooks," she said, explaining that, in the bigger scheme of things, wildfire-related damages are small potatoes when it comes to the insurance industry. For the sake of comparison, Walker cited some statistics. The Colorado wildfires of 2002, including the Hayman fire, the Coal Seam Fire and the Missionary Ridge fire, resulted in about $70 million worth of insured damages, By contract, a 1993 blizzard caused $93 million worth of insured damages. And in a matter of just a few minutes, a summer hailstorm can result in more insured damage than all those 2002 fires combined.

Howard Hallman pointed out that approvals for new subdivisions in fire-prone areas can affect insurance rates for existing residents. When insurance companies assess the risk in new developments, they pass on the cost of covering that increased risk to all their customers in the area. Hallman asked if the industry is going to be pro-active, by going before elected officials to explain the implications of those approvals.

"When people keep putting up homes in the forest, that's an expense to the community," Hallman said. "It's not just the cost of insurance for fire, it's for other services, and I just don't think the (elected offcials) who approve the development are considering that enough."