Backyards and Beyond presenter Jeff Cavanaugh, senior underwriting portfolio manager for USAA, attracted a large crowd to his featured session on insurance discounts for Firewise communities. Cavanaugh highlighted collaborative research between USAA and Firewise which revealed favorable loss performance trends for Firewise residents at community and state levels. The joint effort led to the introduction of the USAA Firewise Community Recognition Discount, a premium discount that supports the goal of rewarding and incentivizing preparation and loss prevention efforts at the parcel and community level. Currently, USAA offers the Firewise discount in Colo ado, California and Texas.
USAA began offering the discount in California in October 2014, and the incentive launched in Colorado and Texas in May and June of this year. Arizona will become the 4th active state in February; and there are plans to offer the insurance savings in six more states – Washington, Oregon, Nevada, New Mexico, Idaho and Utah.
The speaker acknowledged that the insurance discount, by itself, is not the tipping point but more so a tool in the tool belt. He explained that the fire portion of insurance is only 10% of the premium load so, in essence, USAA is discounting 50% of their average with the 5% Firewise Community Recognition Discount. His session, and a few other presentations at the conference, emphasized that insurance companies are playing an increasingly active role in proactive reduction of wildfire loss. Cavanaugh encouraged attendees to contact their insurance companies and to ask if they offer a Firewise discount. If they respond no, ask why not.
A huge fan of Firewise, Cavanaugh hopes that the USAA discount and his Backyards and Beyond presentation will prompt other insurance companies to offer similar discounts to Firewise communities. He explained that insurance companies know that mitigation works; and reminded the audience that consumers have a lot of power and can influence business with their buying choices. He also pointed out that State Departments of Insurance love this discount.
Strong partnerships with the National Fire Protection Association (NFPA), the Firewise community, The Insurance Institute for Business & Home Safety (IBHS) and others were instrumental in USAA creating the Firewise discount. Cavanaugh’s team looked at fire trend data in California, Colorado, Texas and Arizona, did some modeling, and visited communities so that they could convince top USAA executives to offer a discount off insurance premiums.
As Cavanaugh’s session came to a close, he reminded the audience that it takes a village and thanked them for actively working to reduce fire risks in communities.