Software that pinpoints wildfire risk may spark changes in your home insurance costs

Across the United States in 2011, wildfires caused billions of dollars in damage. If you happen to live in an area prone to wildfires, this risk figures into your home insurance rates. A new software product may provide a more accurate assessment of wildfire risk, potentially leading to lower – or higher – insurance premiums for many American homeowners.

“Fire risk is something covered by almost every homeowner’s insurance policy in the United States,” says Pete Moraga, a spokesman for the Insurance Information Network of California.

However, there's no standard formula for determining what a homeowner’s wildfire risk actually is. Insurers’ methods vary, Moraga says. Some may do a home inspection to check the proximity of the home to areas with a wildfire history. Others may depend on the history of claims in your area, Moraga says, or use technology such as satellite imagery or Google mapping to see how close a home is to wildfire-prone areas.

Pitney Bowes has introduced a software product that's designed to calculate wildfire risk for any U.S. location.

The backbone of the software is something called location intelligence technology, says Bill Sinn, marketing director for Pitney Bowes Software. “We can take a specific address and do geocoding on top of that," Sinn says, "and basically put a longitude and latitude to the location.”

wildfireOnce that’s done, the software relies on data that takes into consideration such factors as an area's regular weather conditions and vegetation to determine wildfire risk. The closer an address is to a wildfire-prone spot, the higher the risk is for that particular home.

The cost of accuracy

The software’s ability to pinpoint locations is one of its strengths, says Lamont Norman, product manager for global risk data at Pitney Bowes Software. “If you’re off by as much as a half a mile or even a few blocks, it can radically change what the wildfire risk is,” Norman says.

Some insurers consider certain homeowners to be in areas of high wildfire risk when they actually aren’t, Norman says. Those homeowners likely would see their premiums lowered if their insurers used the new software. On the other hand, homeowners who are at a higher risk for wildfires than their insurers thought could see their premiums rise.

Before you fret about possibly paying higher premium, remember this: You can take proactive steps to protect your home from damage and potentially save lives.

Defending against wildfires

No part of the country is immune from wildfires, but some areas are more susceptible to them than others, says Steve Quarles, a senior scientist with the nonprofit Insurance Institute for Business & Home Safety, which provides advice on protecting homeowners from natural disasters. More than 80 percent of homes that are ignited in wildfires are destroyed, Quarles says. Homeowners often are left to battle the flames on their own since "the fire department is usually busy working on the wildfire itself,” he says.

Costs associated with a wildfire easily reach into the millions of dollars, according to ISO, a company supplies information about property and casualty insurance risks. In California alone, more than half of the state’s homes are at risk of wildfire damage, which poses a potential financial loss of more than $106 billion, according to the Insurance Information Network of California.

In seeking to protect your wildfire-endangered home, the roof is perhaps the most important thing you should address, Quarles says. You want to make sure your roof is fire-resistant. You also want to ensure there’s no flammable debris on your roof, which could wipe out the benefits of fire-resistant materials.

Not all measures to protect your home require a lot of money. “With many things, the cost is your own labor,” Quarles says. Such acts as cleaning debris from the gutters and moving a woodpile away from the side of the house would fall into this category.

Other steps that homeowners should consider:

• Keep fuel more than 3 to 5 feet from your home or from detached buildings such as garages and sheds.

• Keep vegetation between 30 to 100 feet away from your home, depending upon your region’s wildfire risk.

• Keep your lawn watered, as dry grass and shrubs can feed a wildfire.

• Prune trees so that the lowest branches are 6 to 10 feet high.

Depending on where you live, some insurers won’t insure a home unless the homeowner takes some of these steps to defend against wildfires, Moraga says, but “insurers will work with homeowners to try to reduce the risk.”

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