Fire department repeatedly denied coverage of new firehouse construction due to wildfire risk: 'It's just ludicrous'

The wildfire risks in Durango, Colorado, were deemed too high to get any insurance company to cover the construction of a new firehouse. 

The Durango Fire Protection District searched for an insurance policy for months, faced denials from three companies, and was only offered policies costing five times the department's budget. 

What's happening?

As reported in the Denver Post — via Phys.org — Durango's fire department needed to replace an outdated, unsafe, and undersized downtown fire station and found a property next to the existing building to build it. Travelers, Liberty Mutual, and Hartford insurance companies all denied the department coverage for the new building, citing wildfire risks.

"We literally are a fire station building a fire station next to a next fire station between a river and a highway," Durango Fire Chief Randy Black said. "It's 10 feet from the existing one, and they turned us down because of the wildfire risk. It's just ludicrous."

Finally, Central Insurance offered the department a policy for $20,000 per year. 

Why is wildfire insurance coverage important?

The story of Durango's fire department being unable to build a new station is shocking. But it also taps into a broader issue affecting homeowners and business owners in wildfire-prone areas. 

Property insurance is getting increasingly unaffordable, and insurers are dropping customers due to climate-related risks. Higher insurance rates lead to higher living costs, more broadly impacting monthly mortgage and rent payments and overall quality of life. 

Due to the long-term effects of human-caused pollution, including burning dirty energy, wildfires are more of a risk than ever before. Now, the extreme weather events that pollution causes are making insurance coverage out of reach. 

According to CoreLogic's 2024 Wildfire Risk Assessment, wildfires threaten at least 321,294 homes across Colorado, valued at $141 billion. 

Yet insurance coverage is crucial in high-risk areas because the types of intense wildfires spreading across our planet are notorious for total-loss damage.

What's being done to protect property from wildfires?

Government officials nationwide are taking action to ensure their residents have fair access to insurance coverage. 

For example, in New Mexico, the governor declared a state of emergency in six counties and issued an order forbidding insurance policy cancellations for 90 days. California's governor issued an executive order demanding the insurance commissioner address the issue.

Colorado is covered under the Fair Access to Insurance Requirements Plan, which provides coverage for homeowners and businesses when unavailable through traditional insurance companies.

If you are denied coverage due to wildfire risks, look into this bare-bones-style plan and consider filling the gaps with a supplemental plan. As you search for coverage, make your property more wildfire-resistant and save more for your emergency fund to help with costs insurance doesn't cover.

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