Wildfires are on the rise in WA. Are homeowners covered?

The fatal shooting of a teenager at a protest in Seattle has gone unsolved for six years. This is open in your face. How are there no answers? Our investigation has uncovered new evidence and witnesses who say they've never talked to police. Did police ever call you? Not once. Listen to We Keep Us Safe, a new true crime series on the Embedded podcast from NPR. Hey, good morning. I'm Paige Browning. It's Wednesday. This is Seattle now. The worst thing imaginable happens to your home. A flood, an earthquake, a wildfire. What's insurance going to get you? We dig into the data on homeowners insurance in Washington State with Tio Pupescu, KUOW's data and graphics editor. But first, let's get you caught up. Boeing's taking a step back from the autonomous flight business. The company is selling off three of its subsidiaries that do unmanned aircraft to California-based Archer Aviation. One of those subsidiaries is Washington State-based in situ, which builds military aircraft, according to the New York Times. Another is WISC, which is developing autonomous air taxis. Boeing will get a 16% stake in Archer Aviation and still get access to WISC technology. Blood Works Northwest is sounding the alarm about a lack of donations again. The nonprofit says the local blood supply has hit emergency low levels and it's urging people to donate, especially if you're type O or a platelet donor. Just last month, the American Red Cross declared a national blood supply crisis. And an arts note, you may know that a lot of movies set in Seattle aren't actually filmed here. But Friend Thing will be. According to the Seattle Times, this forthcoming movie, a coming-of-age story set in 1996, is being filmed now around town. Shooting will take about a month, and the crew's already been spotted in the University District. We'll be back with more headlines on tonight's episode of Seattle Now. All eyes in Washington State are on Spokane right now as wildfires have torn through that area of the state. Thousands of people were displaced and hundreds of buildings were destroyed. For people whose homes were damaged or destroyed, they're hoping that homeowners insurance cover some of the cost. As Washington's wildfire seasons get more intense, how are wildfires changing the landscape of homeowners insurance? KUOW's Tio Pupescu looked into the numbers. She's our in-house data and graphics editor and co-hosts the Control F podcast. And here she is to talk insurance. Hey, Tio. Hello, hello. Thank you for having me. Of course. So insurance, everyone's favorite topic and favorite monthly bill, right? How does homeowners insurance work in Washington State? Just break down the basics. Yeah. So the deal that you make with your homeowners insurance provider is that you will pay an annual amount every year. And in return, if something were to happen, your insurance will do three things for you. So the first thing it will do is it will cover you for displacement, meaning you can't live in your house because something's gone on with it.

They're going to cover the cost of you staying in like an Airbnb. Usually as a reimbursement, though, so keep those receipts, everybody. The second thing that they cover is the damage to your home itself. So a tree falls through your roof. They will cover the part of your roof that was damaged. But they're not going to cover a whole new roof. Only the damage. This is important, folks. This is where people get tripped up. And then the third thing that insurance agrees to do for you is cover the cost of replacing all the items in your house. So this is kind of similar to renter's insurance, right? All the stuff that got destroyed in a fire, they will pay to replace again as a reimbursement. What does the average Washington state homeowner pay for their homeowner's insurance? So last year, the average Washington state policy was about $1,560 a year. But that price went up 55% since 2020. Holy cow. Yeah. So for folks who have been paying homeowners insurance for quite a while, they are noticing that price increase. And of course, that amount is an average. It's going to be higher in areas with certain risks. Mostly this uptick we're seeing is due to a combination of the big natural disasters we're starting to face like these wildfires and the fact that the cost to rebuild has gone up. So if we look at the numbers, in 2018, insurance providers paid out about $1 billion for damages to homes. That number doubled by 2024 to $2.2 billion, right? Gosh, a lot of money. And as the Northwest faces drier, warmer summers, reduced snowpack, something we're experiencing in a really big way this year, we're basically becoming more flammable, especially on the eastern half of the state. How does that affect homeowners? This is one of those tough to have conversations because for everyone who has insurance, whether you live in Spokane or not. Your insurance rate is determined by your insurance provider, right? We kind of assume that they're taking on the risk. However, lately, a big part of how they decide how much you pay is this internal metric they have called the wildfire risk score. So this will determine how much you pay for a lot of folks, especially on the eastern side of the state. And you can think about it like a credit score. But instead of measuring how likely you are to pay back, for example, a credit card, it is measuring the amount of risk your house poses. Like how likely is it to be engulfed in a wildfire? And the insurance company is creating that score. It's not something we're reporting to them or the state's reporting to them. Oh, yeah, no, it is entirely in the purview of the insurance provider. And in fact, you can't know what your score is. You can't know your score. You can't know exactly what goes into your score. And therefore, you can't really do much to change it, which as we have more wildfires and that wildfire risk score continues to kind of eat up how insurance providers think about risk, we're probably going to be seeing higher premiums in the coming years.

Paige, that is not actually the only concern with this kind of wildfire risk score secret behind the scenes piece. Because another thing that they use this score for is to decide whether to give you insurance at all. If your wildfire risk score is high enough, they will deem you too risky and your insurance will drop you. That is what we call a non-renewal. It's a huge problem in California, as you can imagine. Washington State still has pretty low non-renewals at the moment, but we are trending in the wrong direction. Yeah, whoa, whoa, whoa. Okay, so we, I mean, we're in a state with lots of natural disasters in this really dry climate we're having. Wildfire is a serious concern right now for most of our state. What happens if your insurance drops you? If your insurance drops you, you probably still need to get insurance because you probably have a mortgage. And so homeowners will then end up in a position where they have to apply to the fair plan, which is considered the insurer of last resort, meaning they are not allowed to turn you down and they are not allowed to drop you. Oh, this sounds like there's a catch somewhere. You know, for the most part, it works like regular insurance. You are still paying a premium. You are getting insurance coverage for that. But the premiums tend to be higher. The exact amount that they'll cover tends to be less. So it's just not as great insurance. It has been also called the bare bones plan by a lot of folks, right? How many people are on this fair plan, these insurance of last resort plans? We were looking at about 400 homes on the fair plan at the beginning of this year. That again is trending in the wrong direction. So that's four times the amount that we had just a couple of years ago. And again, this is before the Spokane wildfires. So we are almost certainly going to see more people end up on the fair plan once, you know, everything kind of shakes out in Spokane. Are people just opting not to have homeowners insurance or going without fire protection policies? So in Washington State, we're a little special. We don't actually require homeowners insurance. A lot of other states do. But you are probably not going to be approved for a mortgage if you do not have insurance. And most people buy homes with mortgages, right? So de facto... It is really difficult for folks to opt out of insurance in Washington State. That being said, when I spoke to the Office of the Insurance Commissioner about this, they did provide me some internal data that last year, about 30,000 non-renewals weren't issued by the insurer, meaning that those were issued by the homeowner. We don't know why. Right. Maybe it's that they simply couldn't afford it anymore. They moved. They no longer have a mortgage and so they're not required. That is quite a big number. It's a small portion of the state, but it is on the rise, just like all these. Other numbers trending upward. Only about 14% of homes nationwide are not insured. I was just reading about this.

in regards to the Malden Washington fires in 2020 that basically took out that whole town in eastern Washington. And some of those homeowners had already dropped their plans that covered wildfires because it was way too expensive. So then they were left with nothing. But on that note, can I just ask, is it worth it to have insurance if you're in a natural disaster prone area? What's the math show? I spoke with a few survivors of different types of natural disasters as well as just like standard things that can go wrong in your home. And they all did say the same thing. You just can't afford to not have insurance. To highlight that point, I spoke with a homeowner in Shelton, Washington, who had some pretty severe damage from a windstorm last year. But his house was not a total loss. We did the math for him. We get into his whole story on our Control F episode about homeowners insurance. But the short version is that he ended up saving about 60 grand by having insurance for the last 25 years. Washington faces risks from a variety of natural disasters. We're all familiar with volcanic eruptions, earthquakes. tsunamis, wildfires that we've been talking about. Are Washington residents covered if these things happen? Oh, Paige. I'm so sorry. This is a not so fun fact. Go easy on us. Yeah. So unfortunately, earthquake insurance is not part of standard homeowners insurance packages. It is a separate insurance for most people that you need to purchase. And a lot of people don't do that. So a study by the Office of the Insurance Commissioner in 2018 had about 13.8% of Western Washington homes having earthquake insurance. Kind of an alarmingly small amount when you consider the fact that we live in like one of the highest earthquake risk zones in the country. But again, I can't really, you know, fault people on the fact that this would be another cost on top of what is a rising cost in homeowners insurance. It is very important to note that you cannot rely on your homeowners insurance for earthquake damage. Just let's get that out there, Seattleites, know that about your plan. Similar to earthquake insurance, flood insurance is not part of your homeowner's insurance. It just isn't. It is a separate insurance again. Let's add another one to the list. Most people can get coverage via a federal program, which will have slightly better rates. And I know that, you know, when we think about rising cost of homeowners insurance and then now we're tacking on that earthquake insurance that, like, is on everyone's mind, the idea of then adding flood insurance on top of all of that when you live in Seattle might seem unnecessary in comparison. But... I want to leave you with a statistic here that I got from the office of the insurance commissioner. Over a quarter of flood losses occur in homes outside of flood risk areas. In Spokane, you know, which is getting a lot of attention right now. I just came back from there. It's a rough situation in some of the neighborhoods there right now from fires. People are just wondering what's next as their houses have been destroyed or damaged.

What can we learn from other places in the nation that have experienced increased wildfire rates? Los Angeles is probably a good place to look as a comparison that we had the big Los Angeles fires in January of 2025. I actually spoke with a survivor of that fire who shared some kind of preliminary on the ground data that they have been collecting from fellow survivors of the Los Angeles fires. The stats are quite grim, to be honest. We're over a year out now, and two out of three survivors of those fires are still displaced, meaning they are not back in their homes. Right. So for Spokane, you know, the first thing I think about is this is a very long road to recovery. This story is not going to be over for them for years. On top of that, we talked about how... the deal you make with your homeowners insurance is that they're going to watch out for you when you need cash to live somewhere else, that displacement. A quarter of the survivors of those Los Angeles fires have now run out of displacement coverage from their homeowners insurance. And the really big one. Now, I'll give the caveat that California and Washington are not exactly the same, right, but in those Los Angeles fires. The average gap between the amount of money that insurance paid out and the amount of money that homeowners say they need to finish rebuilding is $500,000. This is just really challenging for people to navigate because most of the time when these things hit, it comes out of nowhere. They're not expecting to have a flood, to have their home. smoke damaged or completely made into ashes by a fire. Who is thinking about relief or trying to provide relief for people? There are a couple of opportunities for improvement that both folks in our state and nationwide have recognized now that we are in this consistent cycle of natural disasters, right? So at our state level, the Office of the Insurance Commissioner, which regulates insurance providers in the state, is pushing some new legislation this upcoming year. They want to take that wildfire risk score and make it transparent. So you would not only be able to know your score, but you would be able to know what went into making it. And if you can change those things, if you can... change how your house is set up so that it's less of a wildfire risk. Sure. Do some firewise landscaping or something. Exactly. And address the things that are listed in your wildfire risk score. It should then directly lead to your insurance not being able to drop you and also to potentially lowering your rate. So that is a big piece of legislation that the insurance commissioner is pushing this year. The other one is what they're calling kind of a restitution bill. So right now in our state, the insurance commissioner can levy fines against insurers that have complaints against them for bad practices, all of that kind of stuff. But they can't actually force insurers to pay out to their customers.

this bill would change that and would give more authority to the insurance commissioner to be able to essentially legally force insurers to pay out. But really, like when I spoke to survivors of fires in the past, one of the big things that they said is that we also just fundamentally need to change our approach to homeowners insurance. to realize that homeowners insurance is not really built for the kind of consistent destruction of entire neighborhoods that we're seeing with climate change and that we probably need something new or different in order to actually make folks not whole because you're probably never going to feel the same after your neighborhood has been destroyed, but at least able to rebuild if they want to. Okay, if anyone's got ideas, it's like we need a new solution for all of this. Tio Pupescu is a co-host of the Control F podcast and our newsroom's design graphics and data editor. Tio, thank you so much for your time. Thanks for having me. To hear more on homeowners insurance and wildfires, listen to Control F on the KUOW app or wherever you get your podcasts. And thank you so much for listening to Seattle Now. If you can, take a minute to rate and review the show on your podcast app or share it with a friend. And before we go, our question of the week. Is it important that Seattle's next police chief lives in the city full-time? Tell us why or why not. You can share your answer in the KUOW app. You open up the menu and select Talk to Us. More at kUOW.org slash question. Today's episode was produced by Vaughn Jay Jones. It was edited by Andy Hurst. Our production team also includes Caroline Chamberlain Gomez, Brooklyn, Jamerson Flowers, and Patricia Murphy. Greg Kramer does our theme music. Seattle Now and KUOW Public Radio are members of the NPR Network. I'm Paige Browning. Talk to you tonight for evening headlines.

Hey, I'm Brandy Fullwood, host of Seattle Eats. How does the place become your go-to spot? Is it the neighborhood? Is it a dish? Is it the fact that it's open when everything else is closed? On the latest episode, a baker lets us in on her industry haunt in the international district. It's the kind of place that serves the late night crowd and the early rising bakers who roll in right after their shift. She'll tell you what to order and how to do it like a regular. Listen to Seattle Eats on the KUOWW app or wherever you get your podcasts.