Costly wildfires may lead to spike in insurance rates - KLTV.com-Tyler, Longview, Jacksonville, Texas | ETX News

Costly wildfires may lead to spike in insurance rates

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PHOENIX (CBS5) -

Arizona wildfires may soon force insurance companies to fork over more money in damages than ever before. And the costs could be passed onto consumers.

More people are moving to wildfire-prone areas in the state, and this drought only adds fuel to the fire - literally.

While consumers won't be seeing insurance spikes in the next few months, if the area keeps seeing high wildfire activity, consumers will soon feel it in their wallets.

"You hear about mountain lions in backyards and bears. People are obviously moving outward," said Kate Matsler.

"You're seeing them take off to the second homes, the Flagstaff, the Prescott, Payson areas," said Trey Martin.

According to the Insurance Information Institute, the 38 catastrophic wildfires in the U.S. last year totaled $595 million in insurance losses.

Here in Arizona, 2002's Rodeo-Chedeski fire cost $102 million, 2003's Aspen fire cost $80 million, and while the Wallow fire in 2011 cost millions to fight, insurance claims didn't cost much.

"Damages could be a lot more costly," said Nicole Farr with the Arizona Insurance Council. "We're losing more homes, more property, more personal property. Lives are at risk." She said companies will actually send representatives door to door in those rural areas, making sure people are keeping the brush and fire fuel away from their homes. 

The drought has not helped either. She said urbanites likely won't see their insurance rates spike - yet.

"If we have another large event maybe next year, I would say some of those smaller changes could be seen." Farr said.

Copyright 2013 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.

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