U.S. Wildfires Torch Millions of Acres

Does your business have the right coverage?

Wildfire season got off to a roaring, early start in 2017, with more than 2 million acres burned before the end of March – and more than 7.8 million acres charred within the first few days of September.

The threat

Wildfire season varies geographically, but some experts say that in parts of the U.S. it has lengthened to become essentially year-round.

“There is a lot more development that has pushed into areas where you are probably more prone to have a wildfire,” said Trip Morano, vice president of underwriting for Colony Specialty. “I think 50 to 100 years’ worth of putting out wildfires as opposed to letting them burn has led to a fuel buildup like you saw in Gatlinburg last year.”

He referred to the devastating wildfire in the Smoky Mountains of Tennessee in 2016 as an example. Although the western states’ wildfire season peaks in September, the potential for significant large wildfires remains above normal into October in parts of California, Idaho, North Dakota, South Dakota and almost all of Montana, according to a National Interagency Fire Center outlook.

Argo: Coverage where it counts

“I think we are seeing events more at the extreme end of the curve than we have in the past in terms of wildfire, floods and hail,” Morano said.

Through Colony Specialty, Argo offers excess policies that include wildfire and other disaster coverage for retail shopping centers, office buildings, hotels and other relatively low-occupancy properties.

Morano offered tips to help businesses gauge whether their policies offer enough coverage:

• Have your property appraised to be sure it is sufficiently insured in the event you have to rebuild, replace or repair.

• Coverage should be high enough to cover all assets in the event of loss. Include computers and other equipment, as well as inventory, furniture and records when calculating assets.

• Make sure your policy includes coverage for business interruption (or living expenses for individuals) to cover costs while in the rebuilding phase.

Minimize property risk

Businesses in a wildfire-prone area can take steps to reduce the threat to their property, Morano noted.

• Keep property cleared of brush.

• Cut back landscaping substantially from buildings and any structures.

• Use fire-resistant materials for construction and landscaping.

• Install indoor and outdoor fire sprinkler systems.

• Make sure firefighters can access your property.

The causes

People are to blame for the vast majority of wildfires. Unattended campfires, burning debris, cigarettes, arson and other human activities far outpace the impact of lightning and lava, nature’s fire-starters. A study of 1.5 million wildfires from 1992 to 2012 found that 84 percent were caused by human activity. The findings were published in Proceedings of the National Academy of Sciences of the United States of America (PNAS).

The numbers

• As of Sept. 5, more than 47,094 fires had burned more than 7.8 million acres – about the size of Maryland – across the U.S. this year, according to the National Interagency Fire Center.

• The 10-year annual average (2006–2016) is 49,011 fires burning 5.2 million acres.

• On Aug. 10, 2017, the National Preparedness Level was raised to 5 – the highest level.

• The federal government spent almost $2 billion in 2016 fighting wildfires, according to the NIFC – and that doesn’t include other costs. The true cost of wildfires in the western U.S. can range from two to 30 times higher than the reported firefighting cost, according to a Western Forestry Leadership Coalition report.

International underwriter of specialty insurance and reinsurance products in areas of the property and casualty market.

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