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SIDE STREETS: Insurance demands for fire mitigation may mean big changes in communities

By: Bill Vogrin
June 29, 2013 Updated: June 29, 2013 at 5:30 pm
photo - Red areas on the map are at high risk to wildfires. One in every four Colorado homes is built in a red zone. Source: I-News Network
Red areas on the map are at high risk to wildfires. One in every four Colorado homes is built in a red zone. Source: I-News Network 

On June 10, State Farm Insurance Co. mailed 12,000 letters to homeowners in six Western states alerting them that inspectors would be visiting their properties and taking photos to assess their risk from wildfire.

These letters could dramatically change the look of Colorado Springs and foothills neighborhoods across the West.

Doesn't matter whether you are a State Farm customer. If you live in a "red zone" amid scrub oak and pine trees and junipers like so many in the Pikes Peak region, the decision by the largest property and casualty insurer in the country to crack down on defensible space is significant.

State Farm insures about 22 percent of all Colorado homes, according to the Department of Regulatory Agencies, collecting $336 million in premiums a year. So if it tells 1 in 4 homeowners to cut down their trees or else, that alone would change the complexion of the community.

And knowing that the rest of the industry usually follows the leader, you start to see what I believe is coming for red-zone homes. In Colorado Springs, residents can find a home's wildfire rating by checking the city's website at

State Farm, and the entire industry, put new emphasis on wildfire mitigation after the massive Hayman fire west of Colorado Springs in 2002.

State Farm implemented a "wildfire loss prevention program" the next year and began surveying and assessing properties in Colorado, Arizona, Nevada, New Mexico, Utah and Wyoming. It later expanded to Alaska, Idaho, Montana, Oregon, Washington and California.

The program went into maintenance mode in 2007, said Angela Thorpe, a State Farm spokeswoman.

But that changed after last summer's devastating Waldo Canyon fire, which killed two and destroyed 347 homes in Mountain Shadows. Letters went out a few months later, followed by the latest mailing June 10.

"Given the frequency and severity of fires we are experiencing, we are revisiting that issue," Thorpe said.

I've talked to several people who received inspection letters as well as follow-up letters telling them to cut down every tree, bush and shrub within 100 feet of their homes or face cancellation of their policies. The company is giving homeowners 18 months to comply. Thorpe said the policyholders are given that much time to comply because State Farm recognizes the cost of removing trees.

"We routinely reach out to customers to partner with them to mitigate fire risk," Thorpe said. "We conduct surveys in high-risk areas to determine if people need to do some work to lessen their risk of fire."

She said the company uses inspectors trained by state forestry agency experts and it relies on fire mitigation standards created by the National Fire Protection Association's FireWise wildfire safety program.

"We recommend cutting all trees within 100 feet of a house," Thorpe said, noting the defensible-space perimeter recommended by FireWise recently was increased from its previous 30-foot to 50-foot standard.

"Our recommendation is to cut all trees," she said. "Trees are fuels for fire. Any potential fuels we recommend removing."

When State Farm says it "recommends" removing trees, it is not a casual suggestion. Failure to comply can result in policy cancellation. But Thorpe said most customers gladly agree to make the necessary changes.

"We don't receive a lot of refusal to do so," she said. "Since the program began in 2003, less than 1 percent of our customers have been non-renewed or cancelled because they refused to follow the prevention recommendations."

The people I've been talking to are shocked at the 100-foot perimeter. They shudder at the cost they will face to remove so many trees. They also fear their property values will sink with the loss of some or all landscaping.

Many say they are shopping around for a new insurance company. But they are finding insurance companies aren't interested in writing new policies for homes in Mountain Shadows or other high-risk neighborhoods.

Others say they were dropped and resorted to buying expensive policies through Lloyds of London, which specializes in high-risk insurance policies.

Industry experts caution against jumping companies to avoid the strict new mitigation requirements because they tell me most insurers will start thinking hard about reducing future payouts and adopting similar mitigation demands to State Farm's approach.

Especially given what happened the day after State Farm mailed all those letters June 10.

Of course, on June 11, the Black Forest fire erupted and soon eclipsed Waldo Canyon as Colorado's most destructive wildfire in terms of structures lost. Before it was contained a few days later, it had killed two and destroyed 511 homes, seriously damaged 28 others while charring 14,280 acres.

The timing was a sad coincidence and illustrates why the insurance giant is getting serious about wildfire.

Industry experts say it's reasonable to expect USAA with 690 claims in Black Forest, Farmers Insurance with 469 Black Forest claims, American Family Insurance with 215 claims, and all the others to follow the leader.

Carole Walker, executive director of the industry's Rocky Mountain Insurance Information Association, said many insurers require only "thinning" of trees, not clear-cutting lots.

But she acknowledged that State Farm is doing what lawmakers in California already have done.

"In California, they have defensible space ordinances that require 100 feet in wildfire-prone areas," Walker said, urging homeowners to talk to their insurance agents to understand what is expected.

"Everyone is asking what can we do to make these neighborhoods safer as whole," she said. "We're definitely seeing more emphasis on mitigation. Usually, it's not a matter of cutting down all your trees. Usually it means thinning and moving fuels away.

"But the higher risk you are, the more will be required."

So while the immediate impact of the Waldo Canyon and Black Forest fires was felt by folks who lost everything, the fires tossed embers that are smoldering and could singe the checkbooks and change the landscape of forest-loving folks across the region.


Read my blog updates at


Many in Mountain Shadows and throughout the Pikes Peak region report their homeowners insurance rates are climbing, upwards of 25 percent, while others say their insurance is being cancelled in the wake of last summer's Waldo Canyon fire.

So I called Marcy Morrison, retired Colorado Insurance Commissioner, for her advice.

She strongly urges anyone who feels their insurance premiums are jumping at an unreasonable rate to talk to their insurance agents and, if unsatisfied with the explanation, report the situation to the Division of Insurance.

Call 800-930-3745, email your questions to or fill out an online form at

"The division will call the insurance company and try to get an explanation," Morrison said. "They have to respond to the division."

That's because insurance premiums must be justified by losses and companies are obligated to prove necessity to the state.

"They have to show, without a doubt, their costs have gone up and they have to convince the division it is an appropriate increase in premiums," Morrison said.

She also urged homeowners to closely read their insurance policies and be sure they understand their coverages.

As for decisions to require fire mitigation practices such as defensible space and a 100-foot perimeter or risk cancellation, Morrison compared it to an insurance company's ability to drop high-risk drivers.

"They can pretty much drop you if it is a safety issue and you aren't taking their advice," she said.

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