Despite experiencing fewer devastating wildfires than other Western states, Idaho is grappling with the consequences of increasing wildfire risk on homeowners insurance. Last year, while surveying damage after wildfires, Idaho Department of Insurance Director Dean Cameron noted many close calls where homes had narrowly escaped destruction. ‘It was rather amazing we didn’t lose more homes,’ Cameron said, attributing the relative success to homeowners’ efforts to upgrade their landscaping and home designs for fire safety, as well as firefighters’ dedication.
However, insurance carriers are warning that Idaho is ‘just one firestorm away’ from a catastrophic loss. In response, some insurance companies are raising premiums, limiting coverage in high-risk areas, and refusing new policies. As of April 2024, about 25 of the 91 property insurance companies operating in Idaho had chosen not to renew some or all of their policies, partly due to wildfire concerns.
Rising Premiums and Reduced Coverage
Idaho’s home insurance premiums increased by 46% from 2021 to 2023, making it one of the states with the fastest-growing rates in the country. The average annual cost of homeowners insurance in Idaho was around $1,400 as of May 2024. Factors such as property value, wildfire risk, and mitigation measures like xeriscaping or fire-resistant roofing materials influence insurance premiums.
Cameron explained that Idaho takes a ‘friendlier approach’ to regulating insurance companies, aiming to balance consumer protection with the need for insurers to remain profitable. This approach may help mitigate the exodus of insurance carriers seen in states with stricter regulations, like California.
Mitigating Wildfire Risk
The Idaho Department of Insurance has hosted demonstrations showing the effectiveness of fire-resistant landscaping and home design. One such demonstration compared two model homes: one with fire-resistant features and one without. The traditional home burned to the ground, while the upgraded home was barely damaged.
Some states have successfully implemented ‘mitigation funds’ to help homeowners upgrade their properties and reduce wildfire risk, leading to lower insurance rates. Cameron advocated for a similar fund in Idaho, but the proposal was rejected during this year’s legislative session.
Consumers experiencing difficulties with insurance coverage or significant rate hikes can contact the Department of Insurance’s consumer affairs section for assistance.
