NFPA Journal - March/April 2018 - 54

Safety Policy by Meghan Housewright

THE VIEW FROM
THE NFPA FIRE & LIFE
SAFETY POLICY
INSTITUTE

Ensuring Insurance
HELPING POLICYMAKERS IN CALIFORNIA AND ELSEWHERE PROMOTE WILDFIRE
RISK REDUCTION-AND ADDRESS THE CONCERNS OF INSURERS

alifornia's 2017 wildfire
ensuring communities are designed and
season, one of the worst
built with wildfire in mind.
in state history, will likely
An example of what can happen when
have a long-lasting impact
policymakers do a poor job incentivizing
on the state's embattled
risk-reduction strategies is the National
insurance market. That impact could
Flood Insurance Program (NFIP). The
result in any number of outcomes: it
50-year-old federal program was designed
could prompt changes that improve wildto provide flood insurance to homeowners
fire safety, or it could create a crisis for
where the market will not, and to reduce
millions of homeowners unable to find
the risk exposure through better building
insurance. NFPA's Fire & Life Safety Policy
standards and land use practices. Despite
Institute was created to provide resources
those goals, the number of "severe repetand expertise to promote the former while
itive loss" properties has grown sharply
avoiding the latter as best we can.
over the past 30 years; many NFIP propHomeowners in
Even before last year's horrific wildfire
erties pay premiums well below their true
California could be
season in California-with 1.2 million
risk; and the program is more than $20
facing a looming
acres burned, scores of lives lost, and
billion in debt. So far, NFIP's key takeaway
crisis. But it could also
thousands of structures destroyed, capped
seems to be that regulating insurance prebe an opportunity.
off by January's fatal mudslides-insurers
miums to reflect true risk and incentivize
were retreating from offering coverage
its avoidance is politically fraught and
in areas of high fire risk. According to
often untenable.
a December report from the California
California lawmakers face similar presDepartment of Insurance, "a significant
sures as they seek to aid residents in the
increase in insurer-initiated non-renewals" began after the 2015 WUI. Ten bills addressing consumer protection measures have
fire season, and the trend appears likely to continue. With an esti- been introduced in the wake of the 2017 fires; while they may
mated 3.6 million homes located in the wildland/urban interface be important for making fire victims feel whole, they do not
(WUI), it could be a looming crisis for California homeowners address the underlying insurance challenge posed by millions of
and their communities. But it could also be an opportunity.
homes in the WUI. For that, policymakers need to resist creatCalifornia lawmakers will need to consider options for con- ing a state-run insurance program like NFIP and instead focus
vincing insurers to stay in the state and offer affordable insurance on mitigation and land-use planning strategies that reduce risk.
to properties in the WUI. The insurance commissioner is to be
There are troves of information available on avoiding loss
commended for recognizing that mitigation should lie at the in the WUI, and helping policymakers put this knowledge into
heart of these options. One of the December report's recom- practice is a high priority for the Policy Institute. We are eager
mendations to legislators is to require insurers doing business to explore ways that we can assist, including developing tools to
in the state to offer policies where the "property meets specific communicate risk to citizens and building cost/benefit analysis
mitigation and defensible space criteria," or similarly to make frameworks to evaluate land use and property related regudiscounts available where such mitigation has been undertaken. lations. The stakes are high-policymakers in California and
This should make the message clear: if homeowners want to beyond have an urgent need for solutions that help reduce risk,
qualify for insurance, they will need to take steps to reduce the and the Policy Institute is a willing partner to help them bring
risk of their home burning during a wildfire, such as clearing about this critical change.
combustible vegetation. Such steps would be complemented by
improved community land-use planning, which is critical for Meghan Housewright is director of the NFPA Fire & Life Safety Policy Institute.

54 | NFPA JOURNAL * M A R C H /A P R I L 2 0 1 8

MICHAEL HOEWELER

Table of Contents for the Digital Edition of NFPA Journal - March/April 2018