As soon as we get the model indicator, we look at other attributes that can identify if the house could make it through a fire. If a home is in a high-risk area, we have associates who perform in-person examinations– all with over 20 years of experience in assessing brush and wildfire direct exposures. We want to help the house owner create defensible space around their home. We assist them evaluate the possible fuel sources at different periods– immediately surrounding their houses, then increasing that analysis to 30 and 100 feet and up to 200 ′ if possible. Present structure codes define closed vents and eaves, non-combustible construction, roof and attachments, however older houses typically have building qualities that do not satisfy code and embers can land on or near the home, catch on fire, or go into through a vent, causing a house to spark from within.
This post belongs to a series sponsored by Cincinnati Insurance Company.
Insurance Journals Pamela Simpson spoke with Dorothy Sarna, National Loss Prevention Program Director of The Cincinnati Insurance Companies, to check out the carriers approach to underwriting high net worth house insurance in California, Oregon, Montana and other states experiencing increased incidents of wildfires. At the time of this September 2020 interview, more than 3 million acres had actually burned in California and severe fires were sparking throughout the Pacific Northwest as severe warms and winds carried harmful cinders into various backwoods over the Labor Day weekend.
Dorothy Sarna has more than 30 years of experience in danger management and loss prevention, constructing her wildfire knowledge through training with the National Interagency Fire Center, National Fire Protection Association and FireWise USA. Because joining Cincinnati Insurance in 2015, Dorothy has actually focused on danger management and loss avoidance for high net worth homes in the Western area of the US.
What are the characteristics that would define a high net worth residential or commercial property?
At Cincinnati, our meaning of a high net worth home is one that is inhabited as a main home and is guaranteed for $1 million or above. That figure is based on replacement cost of that home, not the marketplace value, as our protection attends to the replacement of the home in the occasion of a total loss.
As an outcome of the catastrophic wildfires prevailing in California over the last couple of years, has Cincinnati set constraints on insuring high net worth individuals houses in California?
As an outcome of all the recent fire activity, we have more declares information available to us, allowing us to take a more data-driven approach to the process. Rather than develop limitations, we carried out new underwriting guidelines to help us assess the acceptability of the wildfire danger. We assess the risk based on how it designs for wildfire. We look at other attributes that can determine if the home could make it through a fire when we get the model indicator. These elements consist of building products, topography, access, defensible area and the condition and extent of handled landscaping. Those characteristics help us figure out, in conjunction with the model, whether or not we believe we ought to accept or decrease the danger.
Can you elaborate on the risk modeling strategies made use of by Cincinnati for the residential or commercial properties in these high-risk areas?
The model that we subscribe to combines information from highly accurate geocoding and spatial analysis with threat modeling based on the nationwide hazard and threat design to get here at a forecast of intensity and frequency. We saw this with the Woolsey fire in southern California in 2018 where almost 100,000 acres were burned, damaging over 1,600 structures as coal blew into the location due to Santa Ana winds.
In addition to modeling private risk, we are likewise managing our threat at a company level. We participate in very proactive portfolio management to continually examine the total threat level of this business line.
Throughout a risk mitigation or loss prevention inspection at a high net worth house located in a wildfire high-risk area, what type of guidance or solutions are being used?
If a house is in a high-risk location, we have partners who conduct in-person examinations– all with over 20 years of experience in assessing brush and wildfire exposures. We assist them assess the possible fuel sources at various periods– instantly surrounding their houses, then increasing that analysis to 30 and 100 feet and up to 200 ′ if possible.
We also look at construction and initial year constructed of the house. Present building codes define closed vents and eaves, non-combustible construction, roofing and accessories, but older houses typically have structure qualities that do not meet code and coal can land on or near the home, capture on fire, or enter through a vent, triggering a home to spark from within. Houses with any flammable exterior siding, roofing system, deck areas or overhangs are also really vulnerable to damage due to direct flame contact or coal.
Are there any other wildfire-related services that Cincinnati supplies high net worth property owners that independent agents should know about?
Weve contracted with Wildfire Defense Systems, a leader in supplying emergency response and suppression services to insurance policy holders throughout active fires. When a fire is threatening among our insurance policy holders, WDS releases federally certified firemens, who are trained and experienced in structure security and wild land firefighting. When access is allowed, these responders can clear plants, reduce locations, set up short-lived sprinkler systems or, if required, apply gel or retardant to avoid the fire from firing up the structure.
They are our eyes and ears throughout these emergency situations. WDS sends me updates and pictures after they go to each house. With that info, I have the ability to reach out to a homeowner and state, “I just spoke with WDS, your home is great.” The relief I hear on the phone after communicating info to an insurance policy holder about their home is the most rewarding part of my task.
And throughout this procedure, Im communicating with the insurance coverage agent as well, since theyre the ones that have the relationship with the customer. It is actually important to keep the representative informed of the situation as it unfolds so they can support their client during an extremely difficult time.
As a final question, how would you react to concerns that the insurance industry cant sustain ongoing yearly losses from the wildfires in California?
As a market, we have a history of discovering ingenious methods to assist insurance policy holder handle and lower danger. Cincinnati launched a non-admitted program in California through The Cincinnati Specialty Underwriters Insurance Company, which allows us another avenue to finance high danger company in California.
We know that we have to constantly examine our technique, and to do so, we are investing in the best innovation and investing in our personnel so that they comprehend from an underwriting and threat management viewpoint, how to stay abreast of the advancements around wildfire risk. We continue to inform property owners on the steps to take to decrease the dangers to their home environments and structures.
For more details on Cincinnatis wildfire program check out www.cinfin.com.