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Statewide Fire Fees Focus on Prevention
October 4, 2012 - By Annemarie Donkin
PHOTO BY MARY LUKINS
The 2009 Station Fire was one of a series of 63 wildfires in California that year. It burned 160,577 acres and destroyed 209 structures, among them 89 homes. It cost $93.8 million and killed two firefighters. Homes in densely populated L.A. County face a higher risk of being destroyed in a wildfire than any other county in the state.
More than two million California homes face extreme wildfire hazards, according to new research by the insurance industry.
Slightly more than half of them are in Southern California, where huge, wind-driven fires have charred thousands of houses in the last decade.
Considered one of the highest risk areas in the state, homeowners in Topanga will now pay up to $150 annually per habitable structure to cover wildfire costs for homes within the State Responsibility Area (SRA).
Owners of habitable structures in Topanga who are within the boundaries of a local fire protection agency, such as Engine 69, will receive a reduction of $35 per habitable structure for a fee of $115.
The fee will fund a variety of critical fire-prevention services within the SRA including brush clearance around communities on or near public lands; along roadways and evacuation routes; and activities to improve forest health so the forest can better withstand wildfire.
Governor Brown signed AB 29X (Bob Blumenfield, D-Van Nuys) in July, 2011, saying that, due to population and development growth in SRAs, taxpayer-borne costs for fire protection have risen in recent decades.
The SRAs are the areas where the State of California is financially responsible for the prevention , as well as suppression of wildfires; the SRA does not include lands within city boundaries or in federal ownership.
The state began collecting the annual fee in August from homeowners in the 31 million acres protected by state firefighters. There are approximately 19,000 fee payers in Los Angeles.
The bill requires the State Board of Forestry and Fire Protection (Fire Board) to adopt emergency regulations to establish a fire prevention fee, and in order to fund fire prevention activities the law requires the State Board of Equalization (BOE) to assess and collect the fees based on information provided by the Department of Forestry and Fire Protection (CalFire).
According to a July 8, 2011, California Farm Bureau Federation report, the Legislature is counting on the new fees to backfill $50 million that was cut from the Department of Forestry and Fire Protections budget.
The Farm Bureau opposes the fee, calling it a new tax that does not directly benefit individual homeowners.
L.A. COUNTY FIRE DANGER
According to a recent report by the Insurance Information Network of California (IINC), more homes face high risk of being destroyed in a wildfire in densely populated Los Angeles County than in any other county in the state. New industry research underscores that fire danger is not confined to rural areas.
A division of Verisk Insurance Solutions, a company that provides information to the insurance industry, conducted the analysis.
Nearly 15 percent of the 13.5 million homes in California face severe wildfire risk. Thats nearly as many homes as are in the entire state of Colorado, said Candysse Miller, executive director of the Insurance Information Network of California. Wildfire risk is not exclusive to mountain or rural communities. Many of these homes are in densely-populated suburban neighborhoods.
More than 417,000 of these high-risk homes are located in Los Angeles County and Southern California counties represent 53 percent of the high-risk homes statewide.
Statewide, insurers protected more than $3 trillion worth of residential property in 2011, according to the California Department of Insurance.
The California FAIR Plan, the insurer of last resort insuring high-risk properties, insured less than 1.25 percent of it. As a result, private insurers cover nearly 99 percent of the insured residential properties in the state.
Its impossible to know precisely which properties will be impacted by wildfires, said Neil Spector, president of Verisk Underwriting. However, understanding the wildfire risk attributes of individual properties can help insurers effectively manage potential losses by rating policies based on the risk and managing exposure concentrations. In fact, FireLine results have already been approved for rate-making purposes in California.
MEASURING FIRE DANGER
Verisk Underwriting, a leading provider of data and analytics for the property insurance industry, used FireLine, its wildfire risk management system to analyze California wildfire risk.
FireLine utilizes advanced remote sensing technology from Verisks Atmospheric and Environmental Research (AER) business unit to evaluate wildfire risk at the address level.
The AER technology assesses the three primary factors that contribute to wildfire risk:
Fuels: Trees, grasses and brush that feed wildfires were analyzed.
Slope: The grade of the surrounding land was measured as terrain can influence the speed and intensity of a wildfire.
Access: A determination was made on the condition and network of roads leading to each individual property.
ASSESSING YOUR RISK
Using the FireLine results, all properties in California were classified as low, moderate or high risk for wildfire loss potential.
Wildfires have been the most expensive singular events that have occurred in California since the 1994 Northridge earthquake, said Robert Hartwig, president of the Insurance Information Institute. It does seem the losses are in an inexorable climb upward across the country, he added, citing the effects of drought and more people moving into fire-prone areas.
IINC has available an interactive map on its web site, http://www.iinc.org/ that provides a county-by-county breakdown of the number and percentage of homes at risk.
IINC is also on Twitter at http://www.twitter.com/iinc and on Facebook at facebook.com/iinc.org.