Wildfire risk transparency

The number of homeowners who have been nonrenewed or canceled by their insurance company has doubled since 2021. Commissioner Kuderer is working to increase transparency for consumers by requiring insurance companies to provide consumers with more information about the wildfire risk scores impacting their home insurance.

Insurance companies use third-party wildfire risk scores to evaluate a property’s exposure and to determine eligibility for coverage, pricing, and renewals. Companies establishing these scores use satellite imagery, property data, insurance loss data, and fire science to create wildfire risk assessments, down to the individual property level, and then sell these scores to insurance companies. 

Wildfire risk scores are separate from Washington Surveying & Rating Bureau classifications, which evaluate community-level data on fire response, not property conditions. They’re different than climate-related risk scores available on real estate websites, which aren’t used in insurance underwriting, and may not account for community or property-level mitigation efforts. 

Improving consumer transparency was one of the recommendations from the Wildfire mitigation and resiliency standards work group.

Wildfire mitigation grant program

Commissioner Kuderer is working to establish a grant program to increase home resiliency for residents of the most at-risk areas, which was also a recommendation from the Wildfire mitigation and resiliency standards work group.

The Strengthen Washington Homes grant program would fund wildfire mitigation measures based on the Insurance Institute of Home and Business Safety’s (IBHS) standards (PDF 6.42MB). Several states, including Alabama, have implemented similar programs using IBHS standards to reduce claims from extreme weather events. Washington’s pilot program would be funded by the OIC’s regulatory funds and would have no impact on the state budget.

IBHS’s Wildfire Prepared home designations are available for Washington homeowners. The program offers two levels of protection — Base and Plus — and provides homeowners with a checklist of mitigation steps scientifically proven to reduce wildfire risk and maintain insurability.