July 25—All the smoke and fire year after year adds up to New Mexico having the 13th highest home insurance rates in the country, according to a new study by QuoteWizard.
The other 12 are all in Tornado Alley or the main hurricane territory.
“It’s directly linked to the forest fires [in New Mexico],” said Nick VinZantsenior analyst at QuoteWizard, an online insurance comparison platform.
Everything was much more expensive everywhere over the past year, except home insurance. Some places are a perfect match for the “more expensive” home insurance, like New Mexicobut QuoteWizard determined that 17 states had lower home insurance rates in 2022 than 2021.
“Home insurance has become location-specific,” VinZant said.
The highest home insurance rates are in neighboring regions Oklahoma and Texas and nearby Kansas and Nebraskaall on average more than $3,000 a year. Averaged QuoteWizard New Mexico at $2,071 for 2022, a 13% increase over 2021 – the fifth highest percentage increase behind Idaho, Caroline from the south, Missouri and Kansas.
VinZant also discovered New Mexico had the eighth largest gap between the cheapest policy to $1,600 and the most expensive $3,100 for a certain policy.
“We’re seeing a huge price range for the exact same coverage,” VinZant said. “It pays to shop around.”
jerry gomez didn’t think he would spend time on this stuff. But that was before Hermits Peak/Calf canyon fire destroyed his 2,400 square foot home he built 20 years ago in Rociada20 miles north of Las Vegas, New Mexico
Gomez paid $3,300 for $250,000 cover.
Gomez is now building a small 720 square foot house to fend for himself until he can rebuild a bigger house. He expects the full rebuild to cost $550,000.
“I’m not going to get back what I lost because I had no replacement cost,” Gomez said. “A lot of times we don’t pay attention. I didn’t know half of those things. It’s one of those things. I blame myself. If the government comes to help us, I think we’re going to be fine.”
Hermit woodpecker/calf canyon fire was just the continuation of decades of devastating fires in New Mexico. VinZant said New Mexico has seen a 163% increase in natural disasters over the past 20 years and 10 cases of $1 billion– plus the losses caused by forest fires over the past 40 years.
“Now New Mexico is starting to grow at a faster rate than other states,” VanZint said.
And these increases are felt even in areas that do not clash with the forest.
Bertha Salazar saw his annual home insurance premium go from $1,085 at $1,300 over the past three years that the valuation of his two-story, three-bedroom, two-bathroom, 2,059-square-foot home at Santa Fe is passed from $229,000 at $465,000.
She remembers that six years ago her home insurance was only $700 a year ago, but she didn’t realize she was underinsured by a $150,000 Politics.
“At that time, the insurance company didn’t explain to me that I needed to have sufficient insurance,” Salazar said.
But experts say wildfires are a key part of home insurance, especially in Santa Fe.
CoreLogic in 2019 ranked Santa Fe ranked 12th among the top 15 metropolitan areas for wildfire risk based on rebuilding costs. Eight of the top nine were in California with denver; Colorado Springs, Colorado.; and San Antonio, TXthe only other cities ahead Santa Fe.
Bozeman, Mont.based on Headwaters Economics in a July report on wood roofs in wildfire-prone areas determined that Santa Fe County the risk of forest fire is greater than 90% WE counties. But Santa Fe County and Northern New Mexico counties not on the nonprofit’s list of medium to very high wildfire risk counties with an abundance of wood roofs like San Juan, To agreeDona Ana, Other and chaves counties.
The casual observer would think that wildfires are limited to foothills neighborhoods – and, indeed, the Santa Fe Fire Department classifies them as extreme and very high wildfire risk, in part because they often have only one entrance and one exit for traffic and fire trucks. The urban center gets no grades but is also vulnerable, with all arroyos and undeveloped properties awash in flammable vegetation, said Nathan Millersuperintendent of natural spaces at the Santa Fe Fire Department.
“The whole town of Santa Fe is a wild urban interface,” Miller said. “All citizens of Santa Fe must be vigilant about forest fires.”
Vigilance means clearing vegetation within 30 feet of homes, keeping bushes and trees trimmed “and preventing anything from spreading on homes,” Miller said.
The December 30, 2021, Marshal Fire in Colorado was chilling proof that communities didn’t need to be in the forests or on the hills to burn quickly. Rock suburb Louisville and Superior are lowland towns in the prairies. In barely 24 hours, the most destructive fire in Colorado the story destroyed or damaged over 1,000 homes and over 30 commercial structures there.
“You cannot buy a cash value policy in New Mexico,” said carol walkergeneral manager of the Rocky Mountain Insurance Association. “You can only buy a replacement cost policy.”
Construction costs have risen about 17% in the past year and about 26% the year before, according to the Associated General Contractors of America. The United States Census Bureau reports an almost 50% increase in construction spending since 2016, from approximately $1.2 billion at $1.8 billion.
Wildfire isn’t the only homewrecker in New Mexiconoted Walker.
“New Mexico is a hail prone state,” she said. “Hail can cause more damage than a forest fire.
Home insurance is not regulated by the state like health insurance.
“It’s a competitive market,” said Jennifer Catechisdeputy superintendent of the New Mexico Superintendent’s Office insurance, a state agency. “We don’t set their rates. We can check with insurers to make sure they’re adhering to policies correctly. It’s being a mediator between the insurer and the insured.”
The agency’s typical involvement with home insurance companies follows consumer complaints filed with the office.
“There was no significant spike [in complaints]”, said Catechis.
What there has been is some denial of coverage in foothill communities. But Catechis and Walker insist that coverage is available everywhere in Santa Fe.
“New Mexico is not in the same boat as California again,” Walker said. “It is still widely available in New Mexico. Wildfire mitigation requirements may need to be in place to obtain insurance. You may need to shop for it. You will probably pay more.”
“Someone hasn’t done their shopping,” Catechis said of the hypothetical not finding insurance in Santa Fe. “Another insurer would write a policy. Consumers can try to do a little shopping. See if another insurer will cover them. If they can’t get coverage, they can turn to New Mexico [Fair Access to Insurance Program]. The caveat is FAIR will not write a policy on $250,000.”
FAIR was enacted by the Legislative Assembly in 1969 to provide property insurance to homeowners unable to obtain policies in the normal market. FAIR is underwritten by the New Mexico Property Insurance Program.
Homeowners insurance can come with “sticker shock,” but Walker tries to put policy costs into context.
“Insurance is not a huge part of buying a home,” she said.
(c)2022 The Santa Fe New Mexican (Santa Fe, New Mexico)
Visit the Santa Fe New Mexican (Santa Fe, NM) at www.santafenewmexican.com
Distributed by Tribune Content Agency, LLC.