Disaster Guide: How Fire Scores Impact Fire Insurance Rates

Woolsey Fire - 3.jpg

There’s no doubt many Malibu homeowners will likely see a big increase in fire insurance rates. The Woolsey Fire and the fire department’s response to it all factor into what many homeowners may not know about a home’s fire score.

Fire scores that came into existence a few years ago are the insurance industry’s practice of rating a home’s risk for wildfire. Your property’s score will have a huge impact on your wallet and even whether you’re insurable through a company approved by the California Department of Insurance.

Risk assessment companies like FireLine, CoreLogic and ISO use three key factors in rating risk: 

-Fuel determines how much brush is near to feed a wildfire. 

-Slope can increase the speed and intensity of a blaze along with increasing the cost to rebuild. 

-Access identifies the ability of firefighters negotiating a way in and a way out. 

This is mostly determined through satellite technology that can determine roof types, distances to hydrants and brush—part of 70 variables that build the scores. 

“The precision they have is sophisticated,” according to Rene Williams, a Farmers Insurance agent in Malibu. “Companies have to assess the risk that they’re insuring.” Scores range from zero to 30, with zero being a perfect score and 30 being the worst possible indication a property is likely to burn.

Robert Feldman, a local Allstate agent/broker with Coast to Canyon Insurance explained, “A myth is that clients think Malibu is treated differently than other parts of the state. 

“Generally, if a company is willing to write a three, then it’ll write it in Malibu or Sacramento,” Feldman continued. “If a company decides not to insure a five or higher, it doesn’t matter if you’re in Malibu, Rancho Santa Fe or anywhere in between. If an insurance company non-renews based on fire scores, they do it based on that number. That’s why it’s important to know what your fire score is. Generally, most insurance brokers have access to it.” But, Feldman said not to worry about being shut out. 

The California Fair Plan, often viewed as the plan of last resort, is not the only option. 

“This is one of the myths,” Feldman indicated. “There are multiple insurance carriers writing policies. There’s no reason to be on the Fair Plan in most cases.” 

One of the problems with the Fair Plan is its limited coverage of $1.5 million. That may not cover the cost to rebuild, living expenses and loss of personal property. Often, smoke damage is not covered as well. “A lot of people on the Fair Plan got stung for being short of coverage,” Feldman imparted. 

“Before the Montecito Fire, certain companies were writing [policies for properties with scores] in the tens.” That’s no longer the case, Feldman said, with nearly every company in some sort of non-renewals. But he said there are some companies writing in the high 20s. Expect those policies to be pricey and more likely to be with non-admitted companies—therefore, not regulated as tightly with the Department of Insurance (DOI).

Admitted insurance companies have rate increases approved by the DOI. 

“Most of the people impacted by the nightmare in November are with non-admitted carriers,” Williams said. “They have a different qualification for risk. It depends on the underwriting guidelines of the company as to the level of risk they’re willing to take.”

With some insurers taking big losses after last year’s wildfires, they are tightening underwriting guidelines due to risk exposure. Some policies may not get renewed due to huge insurer hits. “Their agent needs to get engaged and find out what the problem is,” according to Williams. 

With a score of zero to three, it should be easy to find an admitted carrier. But Williams advised every company has different fire score system that may not be comparable with others. “Knowing your score may not make sense. It’s completely different from company to company.” 

If you’re thinking about lowering your fire score, it’s rare to find an insurer that will drop it. “The score is the score. You can’t move a fire hydrant,” Feldman pointed out. Williams added, “You can chop down your fuel, but face it. If you’re in Santa Monica Mountains and they’re not trimming brush, no matter how good your defensible space is, you’re going to have challenges.” You may get discounts, however, by installing water tanks or interior sprinklers. 

Knowing your score may be helpful. Knowing your options—even better. The best advice given was to shop around.