Montana homeowners face rising insurance costs due to wildfire risk

MONTANA — As Montana experiences a warm dry winter, state officials are paying close attention to the potential for increased wildfire risk this summer. This situation is drawing attention to home insurance, especially in the state's forested areas.

NonStop Local’s Kendall Hudson reported on the challenges homeowners face in securing insurance in high-risk areas. Montana's Insurance Commissioner James Brown noted that insurance is becoming more expensive and harder to find in these regions.

"In terms of what we’re seeing, big picture here in Montana, we’ve seen over the last several years that homeowners insurance in Montana is getting more expensive and it’s harder and harder for people in high-risk wildfire areas to find adequate coverage," said Brown.

Brown explained that rising costs are due to how insurers assess risk and the increasing cost to rebuild homes. While his office reviews rate filings, they do not set prices.

"One of the things that I absolutely have to make clear to your viewers is that I have no authority as the insurance commissioner, to either approve or disapprove a specific rate," said Brown. "We look at three things. One is if a premium increase is excessive. We can’t set the actual price of the premium, but we can see if it’s excessive. Then we look to see if the premium may be discriminatory."

Homeowners near forests or those building into them may face higher costs or fewer options. Local agents highlight that the significant change is often whether a company is willing to take on the risk.

Tom Monahan, owner of Summit Insurance in the Missoula area, mentioned that companies now use wildfire scoring to decide coverage, influenced by the reinsurance market.

“There’s a new appetite metric, it’s called wildfire scoring. It came about because reinsurance companies implemented this change to manage their risk," said Monahan. "Insurance carriers will pull similar risk and then obtain coverage for those pools from a reinsurance company."

Brown advised that his office can assist if homeowners face non-renewal or steep premium increases. Filing a complaint through the state auditor’s office is an option. He also suggested that homeowners can lower risk and potentially reduce costs by creating defensible space and using fire-resistant materials.