Cabin Insurance. Doug Gann. National Forest Homeowners. NFH Salt Lake City Forum, October 14, 2017

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1 Cabin Insurance Doug Gann National Forest Homeowners NFH Salt Lake City Forum, October 14, 2017

2 Why Insurance? Falling Trees Devils Gate, CA

3 Why Insurance? Fire Two cabins lost in same fire Lake Wenatchee, WA

4 Insurance Survey Collect and share cabin owner insurance experience 877 completed the survey in Dec, 2016 Cabins located in 20 states 21% reported cabin damage or loss (10 yrs) 91% of losses < $10,000 Understanding potential losses help shape insurance needs & preventative measures Water damage 5% Wind Storm 5% Brea k- in/bear 4% Most cabin owners have insurance and most are satisfied with their insurer Fire 2% Snow damage 10% Other 9% Falling Tree 32% Break-in, Theft, Vandalism 33%

5 Reasons Cabin Insurance Cancelled Cabin Insurance canceled by Responses State Farm Insurance 13 Allstate Insurance 7 Fireman's Fund 3 Safeco Insurance 3 Farmers Insurance 2 Liberty Mutual 2 USAA 2 Lloyds of London 2 Single occurrence / not identified 34 Total 68 Cancellation Reasons cited: No longer insuring FS cabins Deemed high risk area Forest fire risk No reason given Change of ownership Distance from fire station No longer insuring in California Shake roof or other sub-standard construction Unable to inspect (in winter) Use of wood stove for heating source Unreasonable replacement value dictated by insurer

6 Cabin Insurance Pricing $3,500 Annual Cost of Insurance vs. Cabin Replacement Value $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 Plotting Annual Cost against Replacement Value reflects significant price variance for insurance with similar coverage. Chart represents 470 responses. Highest 3 & lowest 3 insurance prices removed for illustrative purposes.

7 Cabin Insurance Needs 20% do not have insurance and want it 20% dissatisfied with cabin insurance 60% satisfied with existing cabin insurance

8 NFH Cabin Insurance Program Identified a clear need for a cabin insurance offering Reports of canceled cabin insurance increasing frequency Many cabin owners struggling to find cabin insurance NFH survey indicates some dissatisfaction with coverage or pricing NFH Endorsed Cabin Insurance Program ARM Multi-Insurance Services (CA) licensed in most states (2-3 carriers) Experience with group type programs Strive for competitive availability and pricing Launch by end of 2017? Proposed Insurance Coverage Cabin Replacement (with cash out option) Personal Property Replacement Personal Liability Purchase Directly from Broker NFH membership a prerequisite for eligibility Respect existing cabin owner / insurance company relationships

9 Insurance Suggestions Bundle your insurance policies with the same company Preferred availability and pricing reported by many cabin owners Don t forget about liability coverage Liability issues can be expensive (dog bite example) Don t under-estimate cabin replacement value Cabin owners who rebuilt all stated the cost was higher than expected Seasonal construction will extend time and cost more Site access may require specialized equipment, adding to the cost Constructing to historical standards with approved materials adds cost Availability of contractor and/or sub-contractors in rural areas may extend time and/or add cost NFH Insurance Resources (Website Resources Insurance) Insurance Survey Use Insurers-by-State report

10 Q&A Discussion Questions? Discussion Annual Insurance Survey

11 Fire Protection Classes Partially Not Protected Protected Protected Rating Agencies Insurance Service Office (ISO) Washington Surveying and Rating Bureau (WSRB) Rating Criteria Fire Department Capabilities (Manpower, training, equipment, & emergency communications) Distance to Station (< 5 miles) Water Hydrant (<1,000 feet) Insurers Use Varies Impacts availability & pricing Differs by company Some Insurers Simplify Protected (1-8) Partially Protected (9) Unprotected (10) > 5 miles to Fire Station > 1,000 feet to Hydrant