SOUTHERN COLORADO – With thousands of homes and buildings destroyed by wildfires in California many are wondering what the financial impacts could be.
The question for some Coloradans: will insurance rates increase?
John Putnam, a retired insurance agent in Colorado Springs, said no one knows exactly how these wildfires have affected the insurance industry.
However, because of insurance regulations, Colorado should not feel any financial burdens from this disaster.
In reaction to this latest round of fires Putnam said, “It seems like they can’t get worse, but they do.”
He’s no stranger to the devastation left behind after a wildfire sparks.
“I was the insurance consultant on the Waldo Canyon recovery team and so that’s where my fire experience has come from.”
Watching the flames from the wildfires raging in California Putnam said, “It’s like wow, this is even bigger…then Black Forest and Mountain Shadows or the Waldo Canyon Fire.”
Thousands of structures have been destroyed and without question, it’s an extreme financial loss.
“When you start factoring in the kinds of numbers to rebuild those are going to be some pretty huge numbers.”
However, those monetary impacts, particularly insurance, will stay in California.
“So far it’s not appearing that it’s going to have a detrimental impact to any of the insurance companies involved meaning they’re not in jeopardy of going broke…the insurance companies have reserves. They have reinsurance.”
Putnam also explained that because insurance is state regulated prices are approved at the state level.
“If you’re an existing homeowner, have an existing homeowner’s policy in Colorado, the wildfires will not have any impact.”
While Coloradans are safe from the destruction in California there are still lessons to learn and ones that can be applied at home.
“Consumers have it within their abilities to make sure that they have enough coverage…the areas that most people underinsure is the cost of rebuilding their dwelling.”
It’s a mistake Coloradans shouldn’t make as we know the havoc fires can wreak in our state.
Below are some recommendations from State Farm regarding wildfire safety tips:
- Talk to your insurance agent to discuss the following:
- Coverage needs
- Understanding your deductible
- Knowing the current market value of a property and what it will cost to replace