Renee Pasquinelli has a mantra when it comes to insurers using black box catastrophe models to sweepingly rate California properties as high wildfire risk. It’s one size does not fit all.
Renee is a retired California Department of Parks and Recreation senior environmental scientist. She’s got 30 years of experience managing native vegetation in coastal Northern California. That includes native plant classification and revegetation, environmental restoration, wildfire response, and prescribed fire treatment.
She lives in a sprawling, 2,900-square-foot home with wood siding on a verdant five-acre property of temperate rainforest three miles from Humboldt Bay. Coast redwoods dominate the area. Mowed grass and masses of deer fern and creeping buttercup run from her house to a fence 100 feet away. The vegetation is always green and doesn’t need irrigating.
In 2021, when she bought the property, her home insurer was Berkshire Hathaway Guard. The premium was about $2,000 a year. But in 2023, the company pulled the plug on her home insurance as it pulled out of the California market. She was forced onto the California FAIR Plan for wildfire insurance and a AAA wraparound. Together the two policies cost $9,000 a year. The FAIR Plan component was more than $8,000 by itself based on her high wildfire risk score.
“It was a real shocker,” Renee said. “The insurance is going up, not that they even considered what the climate was here,” she said. “This is typical summer weather. I cannot leave out patio furniture cushions without them being wet in the morning. Typical relative humidity each morning is 90 plus percent, then the sun comes out and extreme highs are maybe 82 degrees. A normal day is 65 to 70 degrees. Frequent fog significantly increases moisture levels. It’s not a high wildfire risk area.”
Her area has no recorded wildfire history. CalFIRE has rated her address and the surrounding area as “moderate,” which is the lowest possible risk score. Under state law, CalFIRE must map fire hazard severity zones based on fuel loading, slope, fire weather, and other relevant factors such as winds.
So, Renee was horrified when she found out that the California FAIR Plan (CFP) paid a software company that uses secret criteria to run a catastrophe model that assigned her property a high wildfire risk score. The company, Zesty, assigned the probability of exposure to wildfire as “moderate” at a 4 out of 10 points, but the property’s vulnerability to wildfire at a 9 out of 10—”very high.”
“Zesty, a private consultant used by California Fair Plan for insurance rate determinations, claimed to use artificial intelligence and satellite imagery to assess my property’s wildfire risk,” Renee said. “Through Zesty’s assessment, CFP inaccurately concluded that my property was a high wildfire risk. It clearly is not.”
After she got her first risk scores from the FAIR Plan, she filed a complaint with the California Department of Insurance that the CA FAIR Plan should include essential local data to reevaluate the scores, including vegetation type, local weather conditions, and CalFire hazard zones. But filing a complaint led from bad to worse.
“Through the complaint process, CFP responded by designating my property as an even higher wildfire risk with a higher insurance cost to be applied next year,” Renee said. “The Department of Insurance completed my complaint process by sending a letter stating that ‘we concluded that the California Insurance Code does not offer you a more favorable option’ than what CFP described.’”
In fact, Zesty was the company to whom CFP turned to handle her appeal. The FAIR Plan wrote Renee that, “Zesty reviewed the scores assigned and confirmed the following scores and primary factors…the key actors increasing the exposure to wildfire risk are low distance to an area with high wildfire suppression difficulty, high wildfire suppression rating, and average annual temperature.”
Renee called and spoke with a Department of Insurance rep. “As I repeatedly explained to the Department of Insurance complaint representative, verbally, and in writing, maintaining the redwood forest vegetation surrounding my home is what maintains the high moisture levels and low wildfire risk,” she said.
“The surrounding redwoods and ferns maintain a damp, cool environment, even during summer months, by producing shade, and intercepting frequently occurring moisture-laden fog, which causes significant ‘fog-drip.’ Clearing to reduce the cover and density of this vegetation, as promoted by Zesty and CFP, would absolutely result in a drier, more fire-prone environment around my home. For wildfire risk in wildland settings, vegetation type, not just vegetation density, is one of the most critical factors to include in assessment models. CFP declined to require that Zesty even consider the redwood forest/sword fern vegetation community in the modelling assessment of my property.”
She bristles at the lack of transparency on the criteria used in the modelling. “Insurance companies have been allowed to hire private AI consultants but there is no oversight on what criteria they use to come up with their models,” she said. “There is nothing to say, well, you need to include relative humidity, for example. I was told by a Department of Insurance rep that the models are proprietary and the Insurance Department cannot ask for the formulas that are used to develop these models. I’m like, what the hell? There clearly appears to be a conflict of interest whereby private consulting firms are being hired by insurance companies to produce wildfire risk results that the insurance companies are legally able to use to raise insurance rates.”
Renee said the Department of Insurance should require California insurers to have consulting companies they hire disclose the factors they use in modelling for wildfire risk. In addition, the Department could come up with enforceable protocols for developing risk models. These would include relative humidity, vegetation type based on formal California classifications, understory, and rainfall. CalFIRE already has criteria they use to designate wildfire hazard zones and for other purposes. For example, CalFIRE experts know what factors cause fire and they are used in conducting controlled burns. The factors include relative humidity, windspeed, 10-hour fuels, 100-hour fuels, and structures.
“These private companies are looking at vegetation cover from satellite and they are calling that the fuel,” said Renee. “They are looking at one component, not rainfall or relative humidity.”
In an incremental step, Insurance Commissioner Ricardo Lara recently announced that he and Cal Poly Humboldt will form a strategy group to come up with the nation’s first public wildfire catastrophe model to predict future wildfire losses. “If the public wildfire catastrophe model is based on science, and effective practices are advanced that also minimize impacts to natural ecosystems, including rainforests that are not fire-prone, then I am certainly supportive of the idea,” said Renee.
Renee said some of the discounts that the FAIR Plan offers for wildfire mitigation right now give her pause. She already qualifies for the 10% wildfire hardening “Protecting the Structure Discount” that requires a class-A fire rated roof, half a foot of non-combustible material at the base of all exterior walls, ember and fire-resistant vents, multi-paned or shutter-covered windows and enclosed eaves.
The other 5% discount for wildfire hardening of “Immediate Surroundings” troubles her. The FAIR Plan Immediate Surroundings discount description provides straightforward instructions such as clearing vegetation and debris from under decks, maintaining a five-foot ember resistant zone around the home, and removal of combustible sheds and other outbuildings to at least a distance of 30 feet from the home. But it also requires that a homeowner maintain a defensible space of 100 feet around a home in compliance with California law.
She won’t apply for that discount until she gets clarification on how that applies to a wet vegetation area straight from CalFIRE. “I want a CalFire fire prevention inspector to come out and give me a site-specific assessment of the wildfire risk at my home, given actual vegetation and weather conditions,” she said. “After that I can go back to the California FAIR Plan and say they are attempting to apply vegetation treatment and calling it reducing wildfire risk, when from my professional perspective that sort of application to vegetation type that is wet forest results in a drier environment because you are not preserving the canopy that retains moisture.”
But clarity from CalFIRE doesn’t mean the FAIR Plan will accept all the factors that Renee argues they should in assessing wildfire risk and in offering discounts. “Legislative changes are needed, and the current Public Resources Code is unclear and not appropriate for all areas,” she said. “Real ecological damage is being done under the guise of wildfire prevention. “Coming from the perspective of a plant ecologist, I am appalled.”
