Idaho Insurance Department Reports Stable 2024 Homeowners Market Despite Rising Wildfire Losses
Although wildfire-related losses remain a small but increasing portion of the annual paid claims, the expected spike in premium hikes and non-renewals in 2024 was less severe than anticipated. This moderation is attributed to insurers making prior adjustments in 2023. The department gathered detailed policy and claims data to better understand market factors like affordability, availability, and insurer exposures specifically tied to wildfire risks.
Currently, about 22 to 25 out of 91 insurers in Idaho have non-renewed some or all policies, partially due to wildfire risks. Notably, non-renewals have occurred even in urban areas, which challenges the common perception that wildfire risk is primarily rural. Factors driving premium increases include wildfire risk, inflation, supply chain challenges, and rising home values, with the highest premiums found in resort and second-home communities.
Educational initiatives promoting wildfire-resistant home construction or "hardening" have been effective in mitigating losses, with homes employing these measures more likely to survive wildfire incidents. This correlation between mitigation efforts and lower claims has led insurers to project losses more accurately, allowing more stable premium pricing during fire seasons.
Policy counts dropped from approximately 464,000 in 2022 to 424,000 in 2023, with a slight rebound in 2024. The department notes about 8,000 policies shifted to surplus lines, but the status of the remaining lost policies is unclear, raising concerns about uninsured exposure. Non-renewals peaked at nearly 28,000 in 2023 but decreased in 2024. Non-renewals are influenced by factors including property condition, unpaid premiums, and insurer solvency. Idaho regulates location-based non-renewals to prevent insurers from withdrawing coverage en masse in specific areas unless financial instability is evident.
Financial data shows that total premiums written increased by roughly 25% in 2024 compared to 2023, reaching $709.85 million. Paid losses overall decreased in 2024, but wildfire-related losses increased to $24.52 million, reflecting the growing impact of wildfire claims despite their relatively small share of total losses. The department plans another data call in 2026 to monitor ongoing market trends and insurer behavior regarding wildfire and homeowners coverage.
This comprehensive data-driven approach by the Idaho DOI informs stakeholders about evolving risks, market dynamics, and regulatory oversight in homeowners insurance amid rising wildfire exposures. The findings emphasize the importance of risk mitigation efforts and regulatory balance to maintain availability and affordability in the homeowners insurance market.