Where There’s Smoke

As New Mexicans struggle to find affordable home insurance, experts offer advice

Against the backdrop of historic and destructive wildfires across New Mexico, some Santa Fe homeowners report it has become more difficult and expensive to insure their properties.

Following the 2022 Hermits Peak/Calf Canyon Fire near Mora as well as 2020′s Medio Fire near Santa Fe, those with homes in the wildland urban interface have increasing challenges.

David Byrne, for example, is building a home in a wooded area above Bishop’s Lodge Road outside of the city limits, and he’s struggling to secure an insurance policy as a result.

As a 15-year customer of USAA with multiple policies, Byrne tells SFR he was surprised to find out a few months ago that the company would not insure his home due to a “fire hazard.”

“I’m fed up with it to be honest with you, and it’s just frustrating when you think you have a relationship with an organization and yet they decide, ‘No, we’re deciding we’re just writing you off,’” he says.

SFR attempted to contact USAA for a comment, but a representative did not respond by publication time.

Homeowners in various parts of Santa Fe County are facing similar hurdles, says county Fire Chief Jacob Black, who tells SFR his department hears about them often.

“We really get inquiries from insurance companies almost on a weekly basis saying ‘Hey, we’re looking at this insurance, can you tell me where the closest staffed fire station is, or where’s the closest fire hydrant?’ And so really, that wildland urban interface is something that is currently being defined kind of case-by-case by the insurance company,” Black says, adding his department has worked alongside wildland teams to complete fire prevention steps. “Is that going to address the problem or the challenges that we’re seeing overall? I don’t know if that will, but that’s where we are working to try to stay at the forefront of that.”

The US Forest Service defines a wildland urban interface area as an area “within or adjacent to an ‘at-risk community.’” These at risk-communities are areas “where conditions are conducive to a large-scale wildland fire disturbance event, thereby posing a significant threat to human life or property.” The designation applies to the foothills of the Sangre de Cristos north and east of Santa Fe, especially where private property boundaries aren’t far from the national forest and are identified as extreme risk for fire.

Rocky Mountain Insurance Association Executive Director Carole Walker tells SFR the rising cost of property insurance in fire prone areas has become a national issue that especially affects Western states. The association conducts insurance education and outreach, as well as preparedness, response and recovery for disasters and wildfires.

“Call it climate change, call it whatever you want. We are in, unfortunately, a perfect storm of escalating risk from wildfires, natural disasters, and at the same time that’s colliding with—I hate to use the word unprecedented—but really we are in what we call the hardest market the insurance industry has experienced in a generation because everything that you pay for insurance for is going up at pretty much astronomical levels,” Walker says. “Everything from the cost of lumber; the cost to repair and rebuild homes; from drywall to glass to labor; all of those things are escalating. And then we’re at some of the highest inflation rates that we’ve seen.”

The Insurance Services Organization conducts a survey to determine the Public Protection Classification of an area, which is a score that ranges from 1 to 10. Class 1 typically represents superior property fire protection, while Class 10 means that the area’s fire suppression program does not meet the ISO’s minimum criteria. Insurance companies then use this rating to help calculate premium rates, Black says.

Most communities in Santa Fe County have a rating below Class 5, with Eldorado rated as having the highest fire protection PPC score: 3. Black tells SFR his department accounts for one third of that classification, and his team is taking steps that include networking with other fire departments to see how they address the problem and establishing a self-certification process with homeowners in rural areas to help them secure insurance.

While some major companies may limit the number of policies they write, Walker says none have left the state of New Mexico entirely. She advises customers to ask insurers about a potential mitigation plan.

“That could be everything from simple DIY common sense steps of moving the woodpiles off the deck and clearing needles away, doing defensible space to home hardening. So, increasingly in this hybrid situation, homeowners are going to have to take those scientifically proven steps to protect the property and some of that may include an investment and you know, hardening the roof, which means making it more fire resistant,” Walker says. “If they come back and say, ‘Yeah, you’re too high risk for us.’ If you’re able to say, ‘Well, I did a B, C, D and E,’ it can help you ensure that you might get renewed. Those are things that will help be an investment in your insurability as well as your safety.”

In the meantime, Byrne says he is hopeful he can find an insurance provider that will write his policy at a markup rate, but he’ll do it with gritted teeth.

“Sometimes you have to grin and bear it, but it’s an assault on a lot of people’s financial capabilities,” he says. “Fortunately, being retired, I’m OK. I can do it for a year or two. This too shall pass, and maybe I’ll get back to finding a better carrier and better rate, but who knows.”

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