All the smoke and fire year after year adds up to New Mexico having the 13th highest home insurance rates in the country, a new study by QuoteWizard shows.
The other 12 are all in Tornado Alley or main tornado territory.
“This is directly related to the fires [in New Mexico],” said Nick VinZant, senior analyst at QuoteWizard, an online insurance comparison platform.
Everything was much more expensive everywhere in the past year – except home insurance. Some states fall in line with “more expensive” home insurance, like New Mexico, but QuoteWizard determined that 17 states have lower home insurance rates in 2022 than 2021.
“Home insurance has become location specific,” VinZant said.
The highest home insurance rates are in neighboring Oklahoma and Texas and nearby Kansas and Nebraska, all averaging more than $3,000 a year. QuoteWizard estimated New Mexico at $2,071 for 2022, a 13 percent increase over 2021 — the fifth-highest percentage increase behind Idaho, South Carolina, Missouri and Kansas.
VinZant also found that New Mexico had the eighth largest gap between the least expensive policy at $1,600 and the most expensive at $3,100 for a given policy.
“We’re seeing a huge range of prices for the same coverage,” VinZant said. “It’s worth shopping around.”
Jerry Gomez didn’t think he would waste time on this kind of thing. But that was before 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 $250,000 in coverage.
Gomez is now building a smaller 720-square-foot home to tide her over until she can rebuild a larger home. He expects the full rebuild to cost $550,000.
“I’m not going to get what I lost because I didn’t have replacement costs,” Gomez said. “A lot of times, we don’t pay attention. I didn’t know half of these things. It’s one of those things. I blame myself. If the government comes in and helps us, I think we’ll be fine.”
Jerry Gomez holds up a window Friday at the house he is building on the lot where his old home once stood in Rociada.
Luis Sanchez Saturn/New Mexican
The Hermits Peak/Calf Canyon fire was just the continuation of decades of damaging wildfires in New Mexico. VinZant said New Mexico has seen a 163 percent increase in natural disasters in the past 20 years and 10 instances of wildfire losses exceeding $1 billion in the past 40 years.
“Now New Mexico is starting to grow at a faster rate than other states,” VanZint said.
And these increases are being felt even in areas that do not collide with the forest.
Bertha Salazar has seen her annual home insurance premium rise from $1,085 to $1,300 in the past three years, while the assessment of her two-story, three-bedroom, two-bathroom, 2,059-square-foot Santa Fe home has increase from $229,000 to $465,000. .
Bertha Salazar of Santa Fe poses for a portrait in front of her home Friday. With higher insurance rates and higher fuel prices, Salazar can’t afford to drive her truck and it’s now parked in front of her house.
Luis Sanchez Saturn/New Mexican
She remembers six years ago her home insurance was only $700 a year, but she didn’t realize she was underinsured with a $150,000 policy.
“At the time, the insurance company didn’t explain to me that I had to have enough insurance,” Salazar said.
But experts say fire is a key component in home insurance, especially in Santa Fe.
CoreLogic in 2019 ranked Santa Fe 12th among the top 15 metropolitan areas for fire risks based on rebuilding costs. Eight of the top nine were in California with Denver; Colorado Springs, Colo.; and San Antonio, Texas, the only other cities ahead of Santa Fe.
Bozeman, Mont.-based Headwaters Economics in a July report on wood roofs in fire-prone areas determined that Santa Fe County’s fire risk is greater than 90 percent of U.S. counties. But Santa Fe County and Northern New Mexico counties did not make the nonprofit’s list of moderate to very high fire risk counties with an abundance of wood roofs like San Juan, Grant, Doña Ana, Otero and Chaves counties.
The casual observer would think that wildland fires are limited to lowland neighborhoods—and, indeed, the Santa Fe Fire Department rates them as extreme and very high wildland fire danger, in part because they often have only one entrance and one exit for traffic and fire engines. The urban center receives no assessment, but it is also vulnerable, with all the arroyos and undeveloped properties flooded with flammable vegetation, said Nathan Miller, wildland supervisor for the Santa Fe Fire Department.
“The whole city of Santa Fe is a wild urban interface,” Miller said. “All citizens of Santa Fe should be alert to wildland fire.”
Vigilance means clearing vegetation within 30 feet of homes, keeping shrubs and trees trimmed “and not allowing anything to overhang the house,” Miller said.
The December 30, 2021 Marshall Fire in Colorado was chilling evidence that communities don’t have to be in forests or hillsides to burn quickly. Boulder suburbs Louisville and Superior are prairie towns. In just 24 hours, the most destructive wildfire in Colorado history destroyed or damaged more than 1,000 homes and more than 30 commercial structures 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 replacement cost policy.”
Construction costs have risen about 17 percent over the past year and about 26 percent the year before, according to the Associated General Contractors of America. The US Census Bureau reports a nearly 50 percent increase in construction spending since 2016 from about $1.2 billion to $1.8 billion.
Wildfire isn’t the only home wrecker in New Mexico, Walker noted.
“New Mexico is a hail-prone state,” she said. “Hail can cause more damage than fire.”
Home insurance is not regulated by the state like health insurance.
“It’s a competitive market,” said Jennifer Catechis, deputy superintendent of the New Mexico Office of the Insurance Superintendent, a state agency. “We don’t set their rates. We may query insurers to ensure that they accurately comply with policies. It is an intermediary between the insurer and the insured.”
The agency’s typical involvement with home insurance companies follows consumer complaints filed with the office.
“There has not been a significant increase [in complaints]”, said Catechis.
What there has been is some denial of coverage in lowland communities. But Catechis and Walker insist that coverage is available everywhere in Santa Fe.
“New Mexico is not in the same boat as California yet,” Walker said. “It’s still widely available in New Mexico. Fire mitigation requirements may need to be in place to obtain insurance. You may need to shop for it. You will likely pay more for it.”
“Someone didn’t buy,” Catechis said of the hypothesis of not finding insurance in Santa Fe. “Another insurer would write a policy. Consumers can try to do a little shopping. See if another insurer will cover them. If they can’t get coverage, they can turn to New Mexico [Fair Access to Insurance Program]. The caveat is FAIR will not write a policy over $250,000.”
FAIR was enacted by the Legislature in 1969 to provide property insurance to property owners unable to secure policies in the normal market. FAIR is underwritten by the New Mexico Property Insurance Program.
Home insurance can come with a “sticky buddy,” but Walker tries to put policy costs into context.
“Insurance is not a big part of buying a home,” she said.