Occasionally, we check in with our colleagues at Boulder Reporting Lab about the stories they're following. Reporter Tim Drugan joined us this time to talk about insurance carriers rethinking their coverage offerings in fire-prone Colorado and the latest in Marshall Fire-relatedlawsuits against Xcel Energy.
“Insurance companies are masters of their data and climate change is throwing their models all out of whack,” Drugan told KUNC. “You can't keep operating the way you were when hundred-year fires began happening every 10 years.”
Some insurance companies are reassessing their presence in Colorado. According to the Boulder Reporting Lab story, Allstate has cancelled some policies, and Argenia no longer offers new policies to people in the area.
“From insurance companies’ perspectives, a lot of Coloradans are living in harm's way,” Drugan said. “Especially for smaller insurers, there's a concern that if they have too many homes in high-risk areas, maybe in Colorado's mountain communities where the landscape is adapted to burn, they could potentially face insolvency.”
The state legislature passed a bill this year to address the problem. The Fair Access To Insurance Requirements (FAIR) Act created a fund to insure people who have been unable to obtain coverage on the commercial market. Many say it’s not enough.
“It is barebones coverage,” Drugan said. “It tops out at $750,000, which for a lot of mountain homes would not come close to covering a rebuild.”
In a related story, Xcel Energy is facing multiple lawsuits after authorities said one of the company's power lines played a role in starting the Marshall Fire.
“I don't know how much traction these lawsuits are going to get,” Drugan told KUNC. He mentioned Pacific Gas & Electric as an example of a utility found negligent in causing a fire. The company paid out $55 million to avoid criminal prosecution over two California fires.
“It was proven that they [PG&E] had neglected a lot of the maintenance on their infrastructure and it started wildfires.”
The Boulder County Sheriff’s Office said it would not pursue a criminal case against Xcel.
“This is maybe just insurers trying to recoup some of their losses. And I don't know if they will be successful because when you have hundred-mile-an-hour gusts of wind, even the best maintenance is likely not going to be adequate to keep power lines from not becoming unmoored.”
