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Electric cooperatives that want to get sufficient insurance coverage for wildfires need to develop wildfire mitigation plans, says Phil Irwin, president and CEO of Federated Rural Electric Insurance Exchange.
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“If you're in the western part of the United States and you don't have a wildfire mitigation plan, it's very hard to get the coverage you need," he says.
Wildfire mitigation plans are mandated by the reinsurers that provide insurance coverage to Federated, Irwin says.
Federated and most insurers buy coverage from other insurance companies— known as reinsurers—to spread the risk of paying out large claims from major disasters such as wildfires or hurricanes.
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In order to buy and maintain desirable levels of insurance coverage, co-ops must document that they are actually carrying out their wildfire mitigation plans to satisfy the reinsurers, Irwin says.
The documentation must address such specifics as how co-ops are dealing with “hazard trees" that are in danger of falling onto power lines and what progress they're making in replacing wooden poles with fire-resistant composite poles or other alternatives.
“Our folks here at Federated will say to the co-ops, 'Let's see some documentation so we can show our reinsurers that you have a plan and that, yes, you're following it.'"
Federated has worked with Vantage Point to provide co-ops with templates to help them get started drawing up a plan.
“You can go ahead and do more than your plan specifies, but don't do less," he cautions.
As the threat of wildfires grows, Irwin says that one of his biggest challenges is “trying to convince the folks on the East side of the country that it's coming your way, and it's going to be more of an issue for you than it has been in the past."
This year, destructive wildfires have burned through parts of New York, New Jersey, Alabama and the Carolinas.
Despite the increasing danger, Irwin says that co-ops give him hope because they are taking their wildfire mitigation efforts so seriously.
“They are trying to do the right thing. They don't want to lose the communities they love to wildfires."
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