{"id":37676,"date":"2022-10-26T00:09:35","date_gmt":"2022-10-26T06:09:35","guid":{"rendered":"https:\/\/dh.durangoherald.com\/tj\/fire-stricken-rural-new-mexico-warily-eyes-insurance-fight\/"},"modified":"2026-03-31T02:39:09","modified_gmt":"2026-03-31T08:39:09","slug":"fire-stricken-rural-new-mexico-warily-eyes-insurance-fight","status":"publish","type":"post","link":"https:\/\/dh.durangoherald.com\/tj\/fire-stricken-rural-new-mexico-warily-eyes-insurance-fight\/","title":{"rendered":"Fire-stricken rural New Mexico warily eyes insurance fight"},"content":{"rendered":"

\"The
The Calf Canyon\/Hermit Peak Fire burns near Pecos, New Mexico, May 25, 2022. The government-sparked wildfire helped to shine a light on a system in which insurance coverage comes at premiums that make it unobtainable. (Eddie Moore\/The Albuquerque Journal)<\/span>Eddie Moore<\/span><\/figcaption><\/figure>\n<\/p>\n

ALBUQUERQUE \u2013 Manuel and Marcy Silva combed through the charred rubble that used to be their home, searching for any salvageable bits in the wake of the largest wildfire in New Mexico history.<\/p>\n

Manuel found two of his high school wrestling medals. Gone was the bedroom furniture Marcy\u2019s grandpa built as a gift, her wedding dress and their children\u2019s toys.<\/p>\n

The family was only one payment away from owning their single-wide mobile home and like many other northern New Mexico residents whose homes were in the path of the flames, the Silvas were uninsured.<\/p>\n

After scorching more than 530 square miles (1,373 square kilometers) of the Rocky Mountain foothills, the government-sparked wildfire is helping to shine a light on what New Mexico officials are calling a crisis \u2013 where insurance coverage for everything from homes to workers\u2019 compensation comes at premiums that often make it unobtainable for many in the poverty-stricken state.<\/p>\n

New Mexico officials are banking on a California insurer relocating to the state and selling policies to low-income and underserved areas. But the multimillion-dollar merger involving California Insurance Co. has been clouded by pay-to-play allegations<\/a> and remains stalled in court.<\/p>\n

On Thursday, a California judge stopped short of granting New Mexico\u2019s request to intervene in the case but cleared the way for the state to weigh in on a proposed plan to resolve ongoing conservatorship proceedings<\/a>.<\/p>\n

Attorneys for New Mexico argued during the hearing that the need for more insurers has only intensified since the proceedings began more than three years ago. They pointed to businesses having a difficult time securing adequate workers\u2019 compensation coverage.<\/p>\n

New Mexico Attorney General Hector Balderas told The Associated Press that he\u2019s concerned about families not being able to insure their homes as the risk of wildfire and post-fire flooding escalate amid climate change.<\/p>\n

\u201cI\u2019m very concerned that moving forward these natural disasters are either going to raise premiums or we\u2019re going to be in a deeper crisis like Florida, where insurance providers don\u2019t want to come to New Mexico because it\u2019s a very challenging market to insure,\u201d he said.<\/p>\n

Wildfires have burned about 11,000 square miles (28,490 square kilometers) across the U.S. so far this year, slightly outpacing the 10-year average<\/a>. The season started early in New Mexico when the U.S. Forest Service failed<\/a> to take into account the ongoing drought and measures meant to lessen the fire danger were whipped out of control by strong winds.<\/p>\n

The federal government agreed to funnel $2.5 billion in recovery funds<\/a> to New Mexico in what members of the state\u2019s congressional delegation described as a \u201cdown payment\u201d on what would be a decadeslong recovery.<\/p>\n

While the relief money has been celebrated by New Mexico officials, residents in remote villages scattered throughout the mountains say they have had a difficult time filing claims with federal emergency managers and that there\u2019s no system for quickly getting families the help they need.<\/p>\n

Mike Maes has armored his home with sandbags and a ladder is nearby so he and his family can escape to the roof in case of more post-fire flooding.<\/p>\n

\u201cI\u2019m not the type of person to go beg for help or go cry for this, that and the other but I\u2019m tired,\u201d he said, lamenting that he has been forced to take time away from his barbershop business to clean up debris and truck in water for flushing toilets and taking showers now that the well on his property has been ruined.<\/p>\n

He tried to get insurance years ago but it would have cost more than what he could have insured his property for.<\/p>\n

The Silvas said the cost of insuring a single-wide mobile home manufactured in the 1970s was insurmountable. And the home used a wood-burning stove for heat \u2013 like many homes in rural New Mexico.<\/p>\n

Marcy Silva works in information technology at New Mexico Highlands, and Manuel is employed by the San Miguel County Public Works Department. They would have opted for insurance if it was affordable.<\/p>\n

For now, they and their two young children are living with Manuel\u2019s parents. They hope to buy another mobile home, but acknowledged that the historic pace of inflation isn\u2019t helping and there\u2019s more work to do to restore their property.<\/p>\n

\u201cThe best way that I can explain it is that it\u2019s been like a never-ending nightmare that just seems to be getting worse and worse,\u201d Manuel said.<\/p>\n

California Insurance Co. officials have given assurances to Gov. Michelle Lujan Grisham and state insurance regulators that they would fill the policy gap in New Mexico.<\/p>\n

Consumer Watchdog, a Los Angeles-based progressive advocacy group, said New Mexico regulators should be cautious about letting CIC operate in the state. The group sued California regulators in 2020 for emails and other communications after reports surfaced that California Insurance Commissioner Ricardo Lara accepted political donations from insurers, despite promising during his 2018 campaign not to do so.<\/p>\n

Lara at the time apologized for accepting political contributions from people associated with Applied Underwriters \u2013 CIC\u2019s parent company \u2013 and other insurers. He returned more than $80,000 to insurers and other donors with business before state regulators.<\/p>\n

Those associated with Applied Underwriters included lobbyist Eric Serna, who retired in 2006 as New Mexico\u2019s insurance superintendent after state officials suspended him over conflict-of-interest issues.<\/p>\n

\"California
California Insurance Commissioner Ricardo Lara speaks at a state Capitol news conference in Sacramento, California, on Wednesday, Aug. 3. The multimillion-dollar merger involving California Insurance Co. has been clouded by pay-to-play allegations and remains stalled in court. (Rich Pedroncelli\/The Associated Press)<\/span>Rich Pedroncelli<\/span><\/figcaption><\/figure>\n<\/p>

Lara came under scrutiny again this year when Consumer Watchdog voiced new concerns about a series of transactions involving insurance industry donations and independent groups working to support his reelection.<\/p>\n

Jerry Flanagan, the consumer group\u2019s litigation director, said the situation facing California and New Mexico homeowners when it comes to wildfire is heartbreaking. Statistics compiled by the insurance industry show about 15% of properties in the two states are at risk of wildfire. Only Montana, Idaho and Colorado have higher percentages.<\/p>\n

\u201cUnfortunately, what insurance companies want from political officials is usually bad for consumers,\u201d Flanagan said. \u201cSo it\u2019s kind of like an out of the frying pan into the fire situation for New Mexico consumers because you need some coverage but the history with California Insurance Co. is that they can\u2019t be trusted.\u201d<\/p>\n

The company disputes the allegations, calling them unfounded and saying that every insurance company in California engages in some form of lobbying.<\/p>\n

Jeffrey Silver, the company\u2019s general counsel, wrote in an email that CIC has provided coverage across California and that the number of complaints from policyholders and claimants for years has been in the single digits compared to the tens of thousands of policies issued and millions of people covered.<\/p>\n

Silver said it\u2019s time California releases its \u201cstranglehold\u201d and clears the way for the company to do business in New Mexico, where he said it still would be subject to regulatory oversight and periodic reviews.<\/p>\n

Balderas, a Democrat who will finish his last term at the end of the year, said what appeals to him is that CIC would be moving its executives and capital to New Mexico once the conservatorship is resolved and would be subject to state regulation and taxation.<\/p>\n

\u201cI believe you can hold a company more accountable if they\u2019re headquartered and provide services in the state,\u201d he said.<\/p>\n

Attorneys are hoping for a resolution next year, but that leaves people like Maes at a difficult impasse.<\/p>\n

Describing life without basic utilities and the potential for devastation that comes with each rainstorm, Maes took a long pause, trying not to get choked up. He said he and his neighbors are tucked away and forgotten and that it\u2019s been hard to cope with all the devastation.<\/p>\n

\u201cIt\u2019s just an ongoing thing over and over again,\u201d he said. \u201cI don\u2019t see light at the end of the tunnel, but there is hope.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

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