Insurers Buck Against Fire-Safety Discounts in Montana

Spending to stomp out wildfires could be reduced by training and rewarding homeowners to practice fire-safety defense, Montana lawmakers said as they presented several bills intended to cut costs.

The bills could force insurers to offer discounts to homeowners living in the wildland-urban interface who take fire precautions, and compel insurers to educate and inspect for preparedness.

Republican Sen. Rick Laible of Darby, a sponsor of two of the bills, said offering discounts on insurance premiums would reward homeowners for being fire-wise.

“You want to change people’s behavior, then give them an incentive,” Laible said.

Good fire-safety practices typically include things like clearing brush or using flame-retardant building materials.

Numerous insurers voiced their opposition to the bills during a hearing on Jan. 14, 2009.

“We want to be part of the solution, but we don’t think it’s fair or correct to tell us to write inaccurate premiums to cover the risk,” said Bruce Spencer, spokesman for the Property Casualty Insurers Association of America.

The bills are the first of more than 20 bills from members of the Fire Suppression Committee to be heard by lawmakers during this session.

The special committee was established in 2007, after an intense summer of raging fires cost the state $43 million.

A study released this last fall by Headwaters Economics, a Bozeman nonprofit, said it cost $36 million to protect homes from that summer’s runaway blazes, with the state covering $13.9 million of the total.

The same study predicted defending homes from fires in Montana could run up to $79 million in state and federal expenses by 2025.

Some of those costs could be snuffed out by requiring insurers to educate their customers in outlying areas about fire-safety, said Sen. Ken Hansen, D-Harlem, sponsor of two of the bills.

But mandatory education — or inspections — would place an unfair burden on their industry, insurers said.

“It seems to me that there are already entities and organizations well-versed and able to educate individual homeowners about the potential dangers in the wildland-urban interface,” said Greg VanHorssen, a State Farm spokesman.

Even if the insurers were ready to offer carrots for good fire habits, environmentalists said the laws do not go far enough to make a real dent in costs.

“They’re all these little baby steps when what we really need to do is tackle this issue head on,” said Anne Hedges, program director for the Montana Environmental Information Center. “They’re not tackling the real fundamental issue, which is telling people that ‘if you build there, you’re on your own.'”