How worried are US homeowners about wildfire risks? – NAMIC report

And how confident are they in their insurance coverage?

How worried are US homeowners about wildfire risks? – NAMIC report

Catastrophe & Flood

By Lyle Adriano

Almost two-thirds of US homeowners in fire-risk states are concerned about the risk of wildfires – yet few are actively taking steps to protect their properties, and even fewer are unsure if their current insurance coverage is enough for fire damage, a new survey by the National Association of Mutual Insurance Companies (NAMIC) has found.

NAMIC commissioned The Risk Institute at The Ohio State University Max M. Fisher College of Business to conduct the survey. Nearly 600 homeowners in 10 states – Arizona, California, Colorado, Florida, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, and Washington – with an increased risk of fire were asked to participate. The report uncovered the following key findings:

  • 59% of homeowners believe wildfire poses a “moderate” to “extreme” risk for them and their property.
  • 63% are worried that their home will be damaged in the next three years due to extreme weather or natural disaster.
  • Only 19% of homeowners feel certain that they have enough insurance to cover damage.
  • When asked if they took fire prevention activities, 20% of respondents had not considered any of the activities, while between 13% and 15% had decided to not pursue these preventative actions.
    • When asked why they would not take preventative action against fire, survey participants listed expense, belief that preventive steps would not offer protection, difficulty, and lack of knowledge as their top reasons.

NAMIC noted that these findings are troubling, especially as wildfire damage in the US has been increasing in recent years. Citing National Interagency Fire Center statistics, the association said that as of November 18, 2022, over 62,000 fires have already burned more than 7.3 million acres in the US – which is more than the 10-year average of 51,000 fires burning an average acreage of just under 7 million.

"As we come to the end of another devastating year of wildfires, it's more imperative than ever that homeowners consider actions to reduce their fire risks, including reviewing their insurance needs," said NAMIC president and CEO Neil Alldredge. "Homeowners don't have to wait for government or others, they can act to protect themselves. There are many inexpensive fire mitigation activities that can be done over a weekend that will help reduce losses and lessen the potential for a crippling financial impact on their family."

Last month, California became the first US state to implement rules that would require insurers to provide discounts to homeowners who have taken steps to mitigate wildfire risk for their properties. It is hoped this new system would incentivize policyholders in the state to safeguard their homes.

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