{"id":26001,"date":"2024-08-21T10:05:02","date_gmt":"2024-08-21T16:05:02","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/fires-making-home-insurance-unaffordable-impossible-n-m-lawmakers-say\/"},"modified":"2024-08-21T16:05:02","modified_gmt":"2024-08-21T16:05:02","slug":"fires-making-home-insurance-unaffordable-impossible-n-m-lawmakers-say","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/fires-making-home-insurance-unaffordable-impossible-n-m-lawmakers-say\/","title":{"rendered":"Fires making home insurance unaffordable, impossible, N.M. lawmakers say"},"content":{"rendered":"

\"Rep.
Rep. Harlan Vincent (R-Ruidoso Downs) asks questions of a panel at the Legislative Finance interim committee in Mescalero. Danielle Prokop\/Source NM<\/span>cca<\/span><\/figcaption><\/figure>\n<\/p>\n

At a hotel surrounded by fresh burn scars, New Mexico lawmakers and insurance regulators described a bleak and uncertain future for prospective homeowners seeking adequate coverage for homes built in and around increasingly fire-prone forests.<\/p>\n

The interim Legislative Finance Committee meeting at the Inn of the Mountain Gods in Mescalero on Tuesday comes shortly after the state\u2019s Office of the Superintendent of Insurance lost a lawsuit against State Farm, New Mexico\u2019s largest insurer. The state accused the company of improperly denying some claims for losses caused by the South Fork and Salt fires in the Ruidoso area.<\/p>\n

The office circulated a handout showing some counties saw huge increases in home insurance premiums between 2020 and 2023, ranging between 41% and 47% in Hidalgo, Roosevelt and Curry counties. On average, New Mexico premiums increased by 16% in the same time period, and the average annual premium is $1,817.<\/p>\n

Since recent wildfires, the office has also noticed an increase in insurers refusing to renew or approve policies in higher-risk areas, said OSI Deputy Secretary Colin Baillio.<\/p>\n

\u201cWe recognize losing that financial protection as a homeowner or as a business owner is a huge issue for that individual, and it needs to be addressed on that basis,\u201d he told lawmakers. \u201cBut it also has the potential for huge ripple effects.\u201d<\/p>\n

Those effects include killing jobs for realtors and homebuilders, harming economic development, and making home ownership extremely difficult for entire communities, including popular mountain towns like Ruidoso, he said.<\/p>\n

But regulators\u2019 hands are tied when it comes to cracking down on insurance companies who refuse to offer policies, Baillio said. As a result, his office is focusing on reducing risk to reassure insurers that they can still operate in New Mexico.<\/p>\n

He\u2019s pushing for risk reduction measures that could include urging individual homeowners to create defensible space around their homes and adopting community-wide improvements \u2013 efforts that he described as \u201clowering risks in a way that the insurance industry recognizes.\u201d<\/p>\n

Despite the uptick in cancellations and non-renewals, insurance companies remain largely profitable in New Mexico, according to OSI. Still, insurers here did have losses in 2016, 2017 and 2022, which is the year the two biggest wildfires in state history occurred.<\/p>\n

Nationally, insurers have paid out more in claims than they received in premiums over the last decade, the OSI reports.<\/p>\n

The South Fork and Salt fires destroyed or badly damaged more than 1,100 homes, including about 230 lost in post-fire flooding. About one-third of those were primary residences, and roughly 10% of the 1,100 households did not have adequate insurance, based on recent estimates from the Federal Emergency Management Agency for how many people are eligible for temporary federal housing. (Only those who are uninsured and lost their primary residence qualify for temporary housing in FEMA trailers or mobile homes.)<\/p>\n

Rep. Harlan Vincent (R-Ruidoso Downs) said many of his constituents will be unable to get insurance on any new home, even if they manage to rebuild.<\/p>\n

\u201cI\u2019ve got plenty of friends that\u2019s in the insurance business. I\u2019m not trying to get the state to compete against them,\u201d he said. \u201cBut what do we do with our New Mexicans, especially in an area that\u2019s been devastated, that want to come home, that want to rebuild?\u201d<\/p>\n

The state does offer insurance, known as the Fair Access to Insurance Requirements plan, but it is a \u201clast resort with minimal coverage\u201d for owner- and tenant-occupied homes and commercial structures, according to OSI.<\/p>\n

The maximum coverage available is $350,000 for homes, and it only covers the actual cash value, not the replacement cost, of a home that is lost. That means lenders won\u2019t provide mortgages for people carrying those plans, lawmakers said.<\/p>\n

Baillio said the OSI is working on being \u201ccreative\u201d with making changes to FAIR plans to convince lenders to provide mortgages to people in fire-prone areas. That could mean increasing policy limits and covering replacement value.<\/p>\n

\u201cWe\u2019re in the same boat as you,\u201d Baillio told Vincent. \u201cIf we can do this through the competitive market, that\u2019s the way to go, but we\u2019ve got to have a backup plan if that doesn\u2019t get us there.\u201d<\/p>\n

Source NM<\/a> is an independent, nonprofit news organization that shines a light on governments, policies and public officials.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

counties saw huge increases in home insurance premiums between 2020 and 2023<\/p>\n","protected":false},"author":1,"featured_media":26002,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[],"tags":[1094,138,84],"naviga_topic":[],"class_list":["post-26001","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-insurance","tag-new-mexico","tag-wildfire"],"acf":[],"author_name":"dh_admin","_links":{"self":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/26001","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/comments?post=26001"}],"version-history":[{"count":0,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/posts\/26001\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media\/26002"}],"wp:attachment":[{"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/media?parent=26001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/categories?post=26001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/tags?post=26001"},{"taxonomy":"naviga_topic","embeddable":true,"href":"https:\/\/dh.durangoherald.com\/tj\/wp-json\/wp\/v2\/naviga_topic?post=26001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}