St. George • Rapid growth and development have put southern Utah’s Washington County on the map, but not always in a good way.
St. George and surrounding towns consistently rank among the fastest-growing metro areas in the country, and the county is projected to top 500,000 residents by 2065. Alas, much of that development is taking place in fire-prone wildland-urban interface areas, or developed lands that border forest and other wilderness areas.
Utah’s fifth-most populous county faces greater risk from wildfire than 97% of other counties across the nation, according to the U.S. Forest Service. That has many county residents feeling the heat with their homeowners insurance policies and premiums. The problem is especially acute in Kayenta, the bucolic Ivins neighborhood built amidst sagebrush and other wild flora.
Skyrocketing premiums, canceled policies
“My insurance went up 50% a year ago, and 62% this year,” Kayenta resident Mike Miller told The Tribune. “My close neighbors have experienced similar increases, with some of them being outright canceled.”
About a mile east of Miller’s home, Ivins residents Dennis and Heidi Smith were informed their insurance carrier would not renew their homeowners policy due to the fire risk in the area.
“I understand about the risk in Kayenta with all the brush there,” Heidi Smith said. “But we don’t live that close to Kayenta and we can’t understand why [it is an issue] where we are at. Even our insurance broker looked at our home and couldn’t understand it.”
State officials say skyrocketing premiums and non-renewals of Utahns’ homeowners insurance is a problem in a high-risk areas in many areas of the state where communities abut against undeveloped lands, notably in Park City and other areas of Summit County.
Despite the competitive pool of about 100 insurance carriers writing policies to state residents, Utah Insurance Commissioner Jon Pike said premiums rose, on average, 38% to 40% between 2018 and 2022.
Still, Pike added, Utah’s homeowner insurance premiums in Utah remain the fifth lowest in the country. He attributes the rising premium to two factors: one, a market correction in which the insurers are raising rates to better reflect their costs and ensure they remain solvent; and two, due to inflationary pressures.
“When the prices for materials or anything involved in the construction of our buildings and homes rise dramatically, insurance [hikes] are going to come next,” he said. “They may be last to the party, but they’ve got to come to the party.”
Another factor is that some maps insurers use in calculating risk and setting premium rates can be antiquated or inaccurate. Each insurer, Washington City Mayor Kress Staheli explained, has a “secret sauce” of maps and other data they use to determine risk and price policies and are reluctant to share that information. Other insurers contract with insurance modeling agencies for maps and other data.
“Most of these models are proprietary,” said Staheli, who owns a Farmers Insurance Agency. “So the insurance companies individually are choosing how to apply these models, which has caused some disruption within the industry and [people’s] ability to acquire and maintain homeowners insurance.”
‘Garbage maps’
(Mark Eddington | The Salt Lake Tribune) The community of Kayenta in Ivins. Homeowners in parts of Washington County are facing spiking insurance rates due to wildfire risk.
Unfortunately, Pike said, sometimes the data insurers use can be just plain wrong. A case in point, he noted, is that one insurer’s maps from a year ago showed the Walmart in the heart of Washington City as being at the highest risk for wildfire, which he said was ridiculous.
On another occasion, Pike said he met with one of the modeling or mapping insuring firms and had them assess his home in St. George so he could better understand how they determined risk. Pike said the firm told him Google Earth-type imaging was used to decide his home was at high risk for wildfire
“They said, ‘It looks like you have some trees that are a little close to your house and you have asphalt shingles on your roof,’” Pike recalled. “I said, ‘Those trees have been gone for seven years and I’ve never had asphalt shingles. The home was built 20 years ago with a tile roof.’”
As a result, the former St. George mayor said the firm fixed the mistakes and lowered his homeowners insurance premiums.
In his talks with insurance companies, Pike said his message is clear.
“I’ve said, ‘We need you to not necessarily reveal your secret sauce to us in terms of how you do it, but you can’t use garbage maps,” Pike told Ivins residents who packed Rocky Vista University last month to discuss the issue.
Alas, the Utah Legislature has not empowered Pike’s department to set rates. All his department can do, he said, is examine the rates to see if they appear “inappropriately discriminatory,” which is difficult to prove. When the department challenged one carrier’s rates before he became commissioner, Pike added, the judge sided with the company and allowed the rate increase to go forward.
Still, Pike and Staheli say most insurance carriers do act responsibly. As for skyrocketing premiums and non-renewals, there is hope on the horizon for some relief. Under House Bill 48, which Gov. Spencer Cox signed into law in March, insurers would be forced to use state maps the Utah Division of Forestry, Fire and State Lands is drawing up to determine those highest-risk wildfire areas in the wildland-urban interface, according to Pike.
The legislation, which goes into effect Jan. 1, requires insurance providers who raise homeowners’ premiums in those interface areas by more than 20% to explain the basis for the rate hike with “reasonable precision.”
State Rep. Casey Snider, who sponsored the legislation, said even if homeowners are determined to be in an interface area, state officials will assess their homes and provide them with some steps they can take to mitigate the risk from wildfire. Once the owners complete those steps, the state will provide them with a “wildfire safe score.”
“So their home would still be in the [wildland-urban interface], but the state would certify it [could] withstand a fire,” Snider explained. “Then that information would be included on the maps insurers are forced to use and become part of the calculus they use to assess premiums.”
Better shop around
For those faced with losing their homeowners insurance or with costly premium hikes, Pike advises them to talk with their carrier to ensure they have the most up-to-date information and what they can do to qualify for renewal or lower rates.
If carriers refuse to cooperate, Pike’s advice is simple: Better shop around.
That’s precisely what Cindy Hanks did when her insurance company sent her a non-renewal notice last fall.
“State Farm is now my carrier and is insuring my home and three cars at the same level of protection and for a lower cost [than my previous company],” she said.
Tips on creating defensible space and other wildfire mitigation measures can be found at wildfirerisk.org.
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