Why Does My Home Need to Be Within 10 Miles of a Fire Station?
Do these names mean anything to you? The Marshall Fire, the Dixie Fire, the Rodeo-Chediski Fire, the Bootleg Fire, the Lahaina Fire, or the Camp Fire.
You may not recognize some of these names but your insurance company does…
Hello everyone, Tia here at Trailstone Insurance.
In the last five years, the United States has seen an increase in wildfires, and the resulting insurance claims have been devastating to the insurance markets. Even worse is the loss of lives and homes from the fires I mentioned, as well as many more that I didn’t mention.
The large insurance losses have caused insurance underwriters to rethink the risk from fires and what can be done to reduce their exposure.
Proximity to Fire Stations and Insurance Rates
There are several factors that go into calculating your homeowner’s insurance rate, and potential fire damage is just one of them. The proximity of the closest fire department is just a small part of the rating factors that the insurance carriers use to assess how likely a fire might affect your home.
First, let’s talk about the distance to the fire station. Insurance companies typically give discounts if you live within 10 miles of a fire station.
Why, you ask?
Home insurance prices are calculated based on the amount of risk the insurance provider is responsible for paying if you have a home claim. If you are more likely to file a claim, you may be charged more for insurance to cover your risk.
This means that having safety measurDDDDDDDDDes, such as smoke detectors, fire extinguishers, and a monitored fire alarm system, can help you save on your home insurance premium, as these measures lower the risk of you filing a claim.
And, living near a fire station can lower your home insurance as well.
This makes sense, right? Living near a fire station means that a fire in your home is more likely to be put out quickly, and the damage minimized.
On the other hand, homes that are farther away from a fire station or even a fire hydrant are more expensive to insure.
So, common sense would say: the further away you are from a fire station, the longer it would take for the fire department to show up. And the longer the fire burns, the more potential damage and cost to repair the damage—which means the insurer will have to pay more for your fire claim.
What If You Live More Than 10 Miles from a Fire Station?
The good news is 99% of the time, yes, we can find insurance for your home if you live more than 10 miles from a fire station.
However, we have seen underwriting rules and coverages change significantly in 2024 regarding homes in fire zones, so here is a quick list of some of the changes and options for insurance.
First, your fire rating score, or ISO rating (Insurance Service Office), may override the distance to the fire station. We have multiple insurance carriers that will work with you if you live beyond 10 miles from a fire station.
Second, many insurance companies are not using ISO ratings anymore. They are purchasing data about your home location from other sources, meaning a poor ISO rating may not cause an automatic denial of insurance like it has in the past.
Third, some insurance companies are now offering a wildfire exclusion or limit of coverage if the home burns due to a “named wildfire.” Unfortunately, this may be the only option for extreme situations. We will make sure you understand the implications if this is the only situation available. Be aware that some other insurance companies offer this coverage restriction without properly educating their clients. Don’t fall into this trap thinking you have coverage for a wildfire, only to find it excluded on your policy. This would be devastating if you had a claim—you could lose everything.
Fourth, an option for coverage may be a state-mandated insurance fund like the FAIR plan. FAIR is an acronym for Fair Access to Insurance Requirements. Generally, FAIR plans will not be your first choice as the premiums are often higher than private insurance markets. Also, FAIR plans frequently restrict coverage limits compared to a normal insurance policy. Keep in mind, a FAIR plan is a government plan to help with a disaster and is not insurance.
Conclusion
So, there are more considerations and options available regarding homes in a high-risk fire zone. Check out my video on Fire ISO Scores, fire mitigation, and the FAIR plans for more information.
If you have a home in a high-risk fire zone and need help now, reach out to my team. We have been watching the market trends and can help you navigate the fire issues to find the best option for your insurance.
Stay safe until the next time we talk…
FAQs
Why does living near a fire station impact home insurance rates?
Living near a fire station means that in the event of a fire, the response time will be shorter, and the fire can be controlled more quickly, minimizing damage. This lower risk leads to lower insurance premiums.
Can I get home insurance if I live more than 10 miles from a fire station?
Yes, it is possible to get home insurance even if you live more than 10 miles from a fire station. Insurance carriers may consider other factors, such as your fire rating score or alternative data sources, to determine your eligibility.
What is a wildfire exclusion in an insurance policy?
A wildfire exclusion in an insurance policy means that the insurer will not cover damages caused by a named wildfire. This can significantly affect coverage options for homes in high-risk fire zones.
What is the FAIR plan in home insurance?
The FAIR plan is a state-mandated insurance fund designed to provide coverage for properties that cannot obtain insurance through the standard market. It typically has higher premiums and restricted coverage limits compared to private insurance.
How can I improve my home’s fire rating score?
Improving your home’s fire rating score can involve measures such as installing smoke detectors, fire extinguishers, and a monitored fire alarm system. Additionally, maintaining a defensible space around your property by clearing brush and debris can help.
Are insurance companies changing their approach to wildfire risk?
Yes, insurance companies are increasingly using new data sources and methods to assess wildfire risk. Some companies are moving away from traditional ISO ratings and incorporating advanced risk assessment technologies.