All of the smoke and fires each year add up to New Mexico having the 13th highest home insurance rates in the world, a new study by QuoteWizard shows.
The other 12 are all in Tornado Alley or the main part of the storm.
“It is directly related to wildfires [in New Mexico]said Nick VinZant, chief analyst at QuoteWizard, an online insurance comparison platform.
Everything was the most expensive anywhere last year – except for home insurance. Some states are associated with “higher cost” home insurance, such as New Mexico, but QuoteWizard determined that 17 states have lower home insurance rates in 2022 than in 2021.
“Home insurance has become a reality,” VinZant said.
The highest home insurance rates are in neighboring Oklahoma and Texas and next to Kansas and Nebraska, all of which are over $3,000 a year. QuoteWizard averages New Mexico at $2,071 for 2022, a 13 percent increase over 2021 – the fifth largest increase behind Idaho, South Carolina, Missouri and Kansas.
VinZant also found that New Mexico had the eighth highest spread between the cheapest plan at $1,600 and the most expensive at $3,100 per plan.
“We’re seeing a lot of growth in comparable prices,” VinZant said. “Every purchase pays.”
Jerry Gomez didn’t think he would waste time on such things. But that was when the Hermits Peak/Calf Canyon Fire destroyed his 2,400-square-foot home he built 20 years ago in Rociada, 20 miles north of Las Vegas, NM.
Gomez paid $3,300 for the $250,000 spread.
Gomez is now building a small 720-square-foot house to support her until she can build a bigger house. He expects the full rebuild to cost $550,000.
“I can’t get what I lost because I don’t have the money to pay it back,” Gomez said. “Most of the time we don’t pay attention. I don’t know half of these things. It’s one of those things. I blame myself. If the government comes to help us, I think it will be good.
The Hermits Peak/Calf Canyon Fire was just the continuation of years of devastating fires in New Mexico. VinZant said New Mexico has seen a 163 percent increase in natural disasters in the past 20 years with 10 events of $1 billion-plus wildfire losses in the past 40 years.
“Now New Mexico is starting to grow faster than other states,” VanZint said.
And the increase is happening even in areas that are not exposed to forests.
Bertha Salazar has seen her annual insurance premiums rise from $1,085 to $1,300 over the past three years while the value of her two-story, three-bedroom, two-bathroom, 2,059-square-foot Santa Fe home has risen from $229,000 to $465,000.
He remembers six years ago his home insurance was $700 a year, but he didn’t realize he had $150,000 in insurance.
“At the time, the insurance company didn’t explain to me that I had to have adequate insurance,” Salazar said.
But experts say wildfires are a big part of home insurance, especially in Santa Fe.
CoreLogic in 2019 ranked Santa Fe at No. Eight of the top nine were in California and Denver; Colorado Springs, Colo.; and San Antonio, Texas, the only cities ahead of Santa Fe.
The Bozeman, Mont.-based Headwaters Economics in July report on wood roofs in fire-prone areas concluded that the fire risk in Santa Fe County is greater than 90 percent of US counties. But the counties of Santa Fe County and Northern New Mexico did not make the list of non-profits at risk of wildfires with dense roofs like San Juan, Grant, Doña Ana, Otero and Chaves.
A casual observer might think that wildfires are confined to the lower reaches – and the Santa Fe Fire Department considers them to be at risk for wildfires, in part because they often have only one way in and one way out. fire extinguishers. Urban areas don’t get the benefit but are at risk, too, with arroyos and undeveloped areas flooded with flammable vegetation, said Nathan Miller, wildland manager for the Santa Fe Fire Department.
“The whole city of Santa Fe is a wild landscape,” Miller said. “All residents of Santa Fe should be alert for wildfires.”
Being vigilant means removing vegetation within 30 feet of the house, keeping bushes and trees trimmed “and keeping anything from going into the house,” Miller said.
The Dec. 30, 2021, the Marshall Fire in Colorado was shocking proof that people don’t have to live in the woods or on the mountainside to burn quickly. Boulder counties in Louisville and Superior are hilly cities. In less than 24 hours, the most destructive fire in the history of Colorado destroyed or destroyed more than 1,000 homes and more than 30 commercial buildings there.
“You can’t buy a cash value policy in New Mexico,” said Carol Walker, executive director of the Rocky Mountain Insurance Association. “You can only buy a premium plan.”
Construction costs increased about 17 percent last year and about 26 percent the year before, according to the Associated General Contractors of America. The US Census Bureau estimates a nearly 50 percent increase in construction spending since 2016 from about $1.2 billion to $1.8 billion.
Wildfires aren’t the only ones that have destroyed homes in New Mexico, Walker said.
“New Mexico is a snow country,” he said. “Snow can do more damage than a wildfire.”
Home insurance is not regulated by the government like health insurance.
“This is a competitive market,” said Jennifer Catechis, deputy director of the New Mexico Office of the Superintendent of Insurance, a state agency. “We don’t set their prices. We can check with insurers to make sure they are honoring the policy correctly. I act as an intermediary between the insurer and the insured. “
The agency’s dealings with home insurance companies are based on consumer complaints submitted to the office.
“There hasn’t been a big rise [in complaints],” said Catech.
What has been there is a refusal to spread in the hilly areas. But Catechis and Walker insist that transmission is everywhere in Santa Fe.
“New Mexico is not in the same boat as California right now,” Walker said. “It’s still in New Mexico. Wildfire mitigation requirements may apply to get insurance. You can buy it. You will probably pay more.”
“Someone didn’t buy it,” Catechis said of the idea of not getting insurance in Santa Fe. “An insurance company can write a policy. Consumers can try to buy less. See if an insurance company will pay for them. If he can’t get help, he can go to New Mexico [Fair Access to Insurance Program]. The caveat is that FAIR does not write policies over $250,000. “
FAIR was established by the Legislature in 1969 to provide property insurance to property owners who cannot obtain policy in the normal market. FAIR is underwritten by the New Mexico Property Insurance Program.
Home insurance can come with “sticker shock,” but Walker tries to put the cost into perspective.
“Insurance is not a big part of buying a house,” he said.