The Takeaways
- Wildfire risk costs many condos and townhouses under homeowner association or HOA the accessibility to property insurance, or they must pay a significantly higher price to be covered.
- Pushing insurance to state sponsored insurers like Fair Plan is not a sustainable solution.
- Wildfire mitigation (clearing vegetations near house) is one way to increase insurability but we need high tech solutions as well.
- It’s good that California Department of Insurance asks insurers to give discounts to home hardening and wildfire resilient communities.
- New solar cells printed on fabrics offer light weight, flexibility and high efficiency on generating solar energy.
- We can hit three birds with one stone by coating solar fabrics with fire retardant so they can generate solar energy, protect roofs, houses, porches, yards and detached buildings and significantly reduce insurance cost. The point is to make fire safety to pay for itself by generating and selling solar power to the grid.
Shocking News in California on the Insurance Side
I’ve just written a post on fighting flood a few days ago and now the news from the Triple-I newsletter shocked me from somewhere closer to home, with a title that seems harmless: “California senate pushes to stabilize the homeowners insurance market.”
When you click it and read it, however, the contents are really nothing less than being shocking. The report started with the sentence that “Homeowners insurance prices in California are skyrocketing with the increased threat of wildfires.”
But to hear the word “skyrocketing” is not enough, you need to see the prices to fully appreciate the change and impact.
This report in early 2022 tells us that “there were an average of 62,805 wildfires and an average of 7.5 million acres impacted annually,” in the years from 2011 to 2020.
There is someone living in a condo in San Diego County, who owns a townhome in an HOA (Home-Owner Association) with 186 others. “During our HOAs last insurance renewal we were notified that we would not be renewed due to proximity to high fire risk areas.”
The policy they started with was $54,000 a year (apparently this is for the so called “master” insurance policy for the entire complex, which HOAs often buy for the common areas like swimming pool, gym, parking lots, gates, landscape, parks and playground, clubhouse, trails, common building and lighting), but now the annual premium for this year is $293,000, a more than five time increase, which led to an emergency assessment to each unit owner to cover the cost of that new premium amount.
From another planned community in Anaheim Hills:
“In 2020, Horizons paid $39,000 for property and fire insurance,” Hayes said. “This year, we are going to pay out $417,000 plus interest,” which is more than 10 times higher.
In another report published on February 16, 2023, Farmers Insurance dropped coverage on more than 1,000 condo owners in San Diego due to wildfire risk.
Limited Fire Insurance Options
When someone lost private fire insurance, they can temporarily use the state’s Fair Plan, a non-profit insurance plan, which is meant to be the insurance of last resort. Fair Plan offers plans that are however not large enough to cover HOAs.
The insurance industry is not too keen on solutions that include state-run insurance programs, like Florida’s Citizens Property Insurance, or California’s Fair Plan that provides fire insurance as a policy of last resort.
One correspondent named Ruiz from Insurance Information Institute (or Triple-I) is quick to point out why insurance companies are not renewing policies on large condo complexes.
“Inflation has really driven up the cost of building,” she said. “Since 2017, we’ve seen a huge increase in the numbers of wildfires and the losses from wildfires.”
When it comes to solving the condo insurance crisis in California, Ruiz mainly talks about wildfire mitigation, like clearing brush and hardening homes.
Policy Incentive for Fire Safety
But future solutions are coming, Ruiz said. Beginning in April, the state will start looking at lower insurance rates as a reward for fire mitigation.
“So the California Department of Insurance has asked all the admitted insurance companies to file new rating structures that would include discounts for home hardening, and community wildfire resilience,” said Ruiz.
“After the changes go through with the Department of Insurance, there will be more insurance available to condo associations, condo owners, and the insurance market will be in a much better place,” Ruiz predicted.
Help at the Federal Level
Within the past year, the Biden Administration has increased efforts to make the job of firefighters safer and better. They’ve done this by signing reform laws into place that drastically increase the compensation for firefighters, change their status to full time employees in many circumstances, and make it easier for them to access mental health services.
In the Biden Administration’s proposed FY2022 budget, there was a significant amount of discretionary dollars earmarked to make new technologies available to firefighters. These technologies could go a long way to making every firefighter more connected, more informed, and better prepared for when disaster strikes, and they’re called into action. Some of these technologies could also make it easier for firefighters that are isolated or injured to be found and rescued.
New Tech Fire Solutions
Here are some of the technologies that the Biden Administration could make available to firefighters, and how they could make a difference in wildfire situations:
Internet of Things (IoT) technologies and sensors
Testing of wildfire detection sensors is currently being spearheaded by the Department of Homeland Security (DHS) Science and Technology Directorate (S&T). According to Jeff Booth, Director of S&T’s Sensors and Platforms Technology Center, “These sensors will provide early alerting capabilities in high-risk areas where detection and alerting aren’t currently available.”
By identifying wildfires in geographically remote, high-risk areas more rapidly, firefighters can begin fighting and managing fires before they grow incredibly large and increasingly dangerous. They can also engage fires before they spread to areas where personal property and lives could be put in danger.
Mobile Mesh Networking
Mobile mesh networking can enable the use of communications and situational awareness tools off the grid in places where other terrestrial networks don’t exist.
This means that firefighters will be able to share information and see each other’s locations even in isolated, remote locations. They can also be used to spread connectivity over a wide geographic area and to each individual without a single, centralized piece of equipment that can be compromised and fail. This means they can deliver resilient and redundant communications that is always available to the firefighter.
Finally, mobile mesh networking can be a low-cost alternative to connecting IoT (Internet of Things) devices. Instead of each individual sensor requiring its own expensive cellular connection – or incredibly pricey satellite connection – mobile mesh can be used to connect IoT devices over a wide geographic area with no recurring cost. This can help accelerate fire focused IoT programs, and enable the government to extend them to more areas at a lower cost to the taxpayer.
Household Self Protection
We have all seen big airplanes dropping red fire retardant powder off the sky over the fired areas. This video shows a preventive alternative before fire starts — without using an airplane. It allows households to spray fire retardant through home or garden hoses on vegetation and yard before fire season.
You do need to spray it every year and it costs $20,000+ a mile for a 20 ft wide zone along power lines or roads. The other potential side effects is environmental or human risk, as fire retardant may have health hazards over human bodies as this video shows.
An Innovation in Solar Panel
Speaking of the home based solutions, one seemingly unrelated development from the MIT One Lab is the creation of solar films that is very thin, flexible, light and yet 18 times more powerful per kilogram than the rigid solar panel that is supposedly capable of turning any surface into a power source. The solar cells are entirely printable, using ink-based materials and scalable fabrication techniques.
While the solar cells are thin and printable, they do have problems. Standing by themselves the solar modules are not easy to handle and can easily tear. The MIT team needs to find a lightweight, flexible, and high-strength substrate to attach their solar cells to.
An ideal material—a composite fabric that weighs only 13 grams per square meter, commercially known as Dyneema, fits the purpose perfectly. By adding a layer of UV-curable glue, they adhere the solar modules to sheets of this fabric. This forms an ultra-light and mechanically robust solar structure.
Hitting Three Birds with One Stone
At this point the idea hits me: If we coat Dyneema with fire retardant chemicals before the MIT solar cells are attached to it, we will produce flame safe and solar capable structure and then install it on rooftops, we will hit three birds with one stone: Home based energy generation, home fire safety and homeowner policies at lowering cost.
ChatGPT, when asked, gives the following answer on the feasibility of fire retardant coating:
“Yes, Dyneema can be coated with a fire retardant coating. Dyneema is a high-strength synthetic fiber that is often used in applications where flame resistance is important, such as protective clothing and equipment for firefighters, military personnel, and industrial workers.
“There are various types of fire retardant coatings available in the market, including intumescent coatings and ablative coatings, which can be applied to Dyneema fibers to enhance their fire resistance properties. These coatings work by either expanding and forming a protective barrier when exposed to heat or charring to insulate the fibers from further heat exposure.”
In terms of the cost, ChatGPT has the following to say:
“Dyneema is a high-performance fiber that is known for its exceptional strength, light weight, and resistance to abrasion and tearing. The cost of Dyneema can vary depending on the specific application, the manufacturer, and the quantity purchased.
“As a general guide, Dyneema is typically more expensive than traditional materials like nylon and polyester. The price of Dyneema can range from several dollars per yard for small quantities to several hundred dollars per yard for industrial-grade products.
“However, it is important to note that the high cost of Dyneema is often offset by its superior performance, durability, and lifespan. Dyneema is often used in applications where strength and reliability are critical, such as high-performance sails, body armor, and climbing equipment, where the high cost is justified by its benefits.”
I would say for high cost neighborhoods and upper scale houses, Dyneema will have a market demand there. For affordable housing and student housing on campus, on the other hand, other fabrics would work better as long as it is transparent (to allow sunlight to penetrate to the solar cells) and flexible (for easy deployments on rooftops, corners, porches, front yard, detached buildings and backyard. Bear in mind that in the long run the cost for Dyneema will be paid off by the energy it generated, so even affordable housing projects can sometimes choose the longer lasting fabrics.
Again, the beauty of this solution is to potentially make fire safety to pay itself, through generating and selling home generated solar energy, and significantly reduces insurance cost.
The good thing is that many roofs in California already have solar panels installed. All we need to do now is to add another very strong home safety reason to install more. Doing so will make an immediate difference in home finance, because insurance companies will be much more willing to cover your house with fire retardant roofs and front yard and backyard. This would apply especially well to all condos and townhouses or anywhere with an HOA, who will no longer be rejected for master insurance policy by a private insurer.
Maybe in the future all solar panels will be fire retardant by default!