Insurance companies dropping coverage

BAILEY, Colo. - After last year's devastating wildfire season, 7NEWS has learned some of the large insurance companies are getting stricter with coverage requirements.

One family in Bailey, who asked not to be named, recently received a policy termination letter from Allstate.

"Why are people getting these letters when they haven't filed any claims," asked 7NEWS reporter Russell Haythorn of Stephanie Howell, a spokeswoman for Allstate.

"I can't talk about individual cases because of privacy concerns," Howell replied. "We make every possible attempt to find something for our customers."

"They're trying to protect their other customers, by managing the customers they're willing to take on," said Carole Walker, an insurance industry spokeswoman.

Walker says insurance companies are getting better at using GPS technology to determine how far homes are from fire stations. In addition to proximity, the kind of fire station and available equipment are being considered.

A home is given the lowest rating of 10 if it sits more than five miles from the nearest fire station.

"They're paying a lot more attention," Walker said.

Assistant Fire Chief Joe Burgett said there are about 1,000 homes in the Bailey area that are at least five miles from the nearest fire station. The family home in Bailey is included in that group.

"We're really stuck where we're at, you know? Our stations can't get any closer to the homes where they're built than they are," he said.

Richard Maher lives in the same neighborhood, and said he also has concerns about wildfires and insurance.

Haythorn asked Howell, "Are people being dropped left and right in Colorado based on what happened last year?"

"I can't speak for other companies, but I can tell you Allstate is not doing blanket non-renewals as a direct result of the wildfires," Howell said.

"Isn't this all just motivated by greed? Insurance companies wanting to bolster their bottom line?" Haythorn asked of Walker.

"We're in a mega-catastrophe age here," she replied. “We’re in this trend and pattern over the past 10 years or so of catastrophic wildfires.”

Allstate did say they would help the family to find another policy, even if it is with another company.

Because of hurricanes and wildfires, respectively, Florida and California have resorted to state-run insurance policies for homeowners who can't get private insurance elsewhere.

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