Insurance crews help protect well-heeled from wildfires

Reuters

By Laura Zuckerman

SALMON, Idaho, Sept 29 (Reuters) - Bill Potter wasn'teager to abandon his high-end house last month duringevacuations forced by a massive Idaho wildfire, but he feltreassured when his insurance company sent a team to protect hishome near the world-class ski resort of Sun Valley.

"I was more than impressed," he said of the water tankertruck and crew privately contracted by his insurer to patrol hisroad and keep watch over his family's home, custom-crafted fromparts of antique barns.

Potter is a member of the AIG Private Client Group, which isgeared toward wealthy policyholders and offers a personalwildfire-protection program for customers in select areas in thewestern United States.

The program, still considered a novel service in a nichemarket, operates under the premise that it is cheaper to defendmultimillion-dollar homes against fire than to replace them.

Companies such as AIG, Chubb and Fireman'sFund are competing to offer extra layers of protection to"gold-plate" properties owned by the well-heeled, said JimWhittle, assistant general counsel with the American InsuranceAssociation.

Services range from clearing trees and brush from around ahome before a fire can start to applying flame-retardantchemicals to the perimeter of a property in the midst of ablaze, according to industry literature.

Jack Dies, head of Sun Valley Insurance and an AIG broker,said premiums for such policies average up to $7,000 a year butthose costs are dwarfed by the value of properties at stake.

Whittle could not quantify how widespread privately fundedwildfire protection has become since first emerging less than adecade ago. But insurance plans offering such services havegrown more popular as homes increasingly encroach on the"wildland-urban interface," where the fringes of communitiesmeet undeveloped, often rugged terrain.

Between 2000 and 2010, 10 million U.S. homes were built inor bordering fire-prone wild lands, representing two-thirds ofall houses built during that period, according to researchconducted by the U.S. Forest Service and others.

"It's entirely likely it will be a continued pattern andapproach," Whittle said of private fire protection.

The presence of private firefighters gained greaterattention this summer as dozens of large blazes raging acrossthe drought-parched West strained traditional governmentfirefighting resources at the local, state and federal levels.

Property losses are estimated to have run into the hundredsof millions of dollars.

AFFLUENT MOUNTAIN COMMUNITIES

Potter was one of thousands of residents forced in August toflee a wildfire in Idaho's Sawtooth Mountains that threatened ascenic river valley whose homeowners included celebrities suchas actor Tom Hanks. Land and properties in the area arecollectively valued at up to $8 billion.

Hundreds of federal firefighters fought the blaze, battlingflames door to door with support from water-dropping helicoptersand airplane tankers. By the time it was over, the so-calledBeaver Creek blaze had blackened 112,000 acres (45,300 hectares)of tinder-dry pine forests and sagebrush flats.

Just one home was lost in the blaze.

None of several insurers - including AIG - that underwritemultimillion-dollar homes in fire-prone regions agreed tointerviews about wildfire protection services.

On its website, AIG Private Client Group pledges to use aproprietary wildfire mapping system to determine which of itsinsured homes are most vulnerable and to automatically sendcrews to take measures such as blanketing a house withfire-resistant foam. Homeowners are not required to alert thecompany or even be on the premises for the emergency fireprotection clause to kick in.

Potter said he was unaware that his policy provided for suchservices until the AIG private fire crew arrived on his street.

"It must have been in the fine print of the contract. But Iwas duly impressed with their presence," Potter said.

COSTLY POLICIES

Dies said crews hired by the company consist mostly oftrained firemen with extensive fire-protection backgrounds.

"The theory is, if they can save one house, their bottomline is a whole lot better," he said.

Firefighting experts still are evaluating how to bestintegrate insurance-hired resources.

Private crews out to protect specific individual propertiesin the midst of mass evacuations can pose a challenge to federalfire managers trying to marshal manpower and resources over awide area, said Steve Gage, assistant operations director forfire and aviation management for the U.S. Forest Service.

He said the agency has sought to accommodate insurancecompany contract crews and engines in recognition of thevaluable services they provide for certain homeowners. Buttactics and objectives sometimes differ between traditionalwildland firefighters and private asset-protection operations.

In some cases, the industry can end up competing with thegovernment for a limited supply of contract fire engines andresidents become concerned about what seems to be governmentcrews working their neighbor's home but not theirs, Gage said.

"The industry is about profit and loss and they're inbusiness to make money," he said.

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