By Purva Patel
The Houston Chronicle
HOUSTON — As homeowners north of Houston return to assess wildfire damage, insurers are reporting record numbers of fire claims from throughout the state.
Initial estimates put losses from these fires at up to $250 million, including $20 million from the Magnolia-area fire alone, said Mark Hanna, a spokesman for the Insurance Council of Texas, an industry trade group.
Adjusters are still waiting to get into the hardest hit area, Bastrop, Hanna said. But the estimates suggest Texas fire losses for 2011 have already surpassed the record $115 million losses in 2009.
Since Jan. 1, State Farm, the state’s largest home insurer, has paid more than $28 million on about 800 fire claims. Those numbers don’t include most of the fires in central and southeast Texas in the past week or so because of limited access to those areas, said Kevin Davis, a State Farm spokesman.
The company has received about 700 claims from Bastrop alone in the more recent fires.
USAA has received about 425 Bastrop-related claims.
Locally, insurers were working to get to homeowners as quickly as possible.
Allstate moved a mobile claims center into Magnolia on Sunday. Chubb Insurance, which insures mostly higher end homes, has contracted private firefighters in Magnolia and other parts of Texas to protect policyholders by adding sprinkling systems to their homes, moving combustible items out of the way and taking other preventive measures, said Scott Spencer, worldwide appraisal and loss prevention manager for Chubb.
As part of its wildfire-defense-services program, the company also has firefighters monitoring homes of customers who have evacuated. The private firefighters would not put out structural fires, Spencer said, but they would extinguish embers.
Mounting losses could lead to higher insurance rates in the affected areas, experts said.
While insurers usually try to allow for disasters, they base their rates on projections made using historical losses. The 2011 wildfires will become part of that historical data.
“A single event in a single year doesn’t necessarily change rates, but it can contribute to a cumulative impact,” said Jerry Hagins, Texas Department of Insurance spokesman.
The impact will be greater if wildfires, and related losses, become more common in coming years, said Robert Hartwig, president of Insurance Information Institute, an industry group.
“If it’s going to be the case that Texas is going to be drier and hotter and wildfires will be more frequent, that will impact the cost,” he said, adding that hikes would be limited to the areas affected. “It affects those areas that are prone to risk, just like somebody in El Paso isn’t paying for hurricane risk.”
Losses and thus rates could also increase as more people move into areas historically prone to wildfires, he noted.
“There’s been a tendency in places like Colorado and so forth to allow development in areas that historically have burned, so it shouldn’t be a surprise,” he said. “Before they burned trees, now they burn houses.”
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