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Wildfires have become an increasingly devastating force across the western United States, with California recently bearing much of the brunt. But the impact of increasing wildfire risk doesn’t stop at state lines. For communities like Globe, evolving insurance industry assessments are reshaping the home insurance landscape, leading to excluded coverage in certain areas, rising premiums, and growing uncertainty for homeowners.
The insurance industry, already under strain from the escalating frequency and severity of natural disasters, has been forced to reassess risk on a national scale.
“Some carriers have completely pulled out of the market,” says Matthew Storms, a local insurance agent in Globe. “If they’re unable to raise rates to offset wildfire-related losses, they often choose to non-renew existing policies or stop writing new ones altogether.”
This trend isn’t isolated. A 2022 study by Harvard Business School found that when insurers are prohibited from raising rates significantly in one area, they often compensate by increasing premiums in less-regulated states. This “cross-subsidizing” spreads the cost of catastrophic events across the entire country.
The impact is acutely felt in Globe, where insurance coverage has been excluded across large areas due to increasing wildfire risk. Fernando Shipley, local insurance agent and Globe City Council member, notes that the problem began after recent local fires.
“Insurance companies started to non-renew existing policies based on perceived fire danger in the area,” he explained. “What’s frustrating is that much of the overgrown vegetation that posed a fire risk has already been burned, yet insurers don’t see it the same way.”
Manufactured homes have been particularly hard hit, with many insurers ceasing to write policies for these properties altogether. Homeowners who do manage to find coverage often face stringent “firewise” requirements, such as clearing vegetation and installing fire-resistant materials, or they may encounter significantly higher premiums.
Insurance companies increasingly rely on advanced technology and data analytics to determine risk. Storms highlights the use of third-party data to assess wildfire history, vegetation density, and proximity to fire departments.
“Thousands of data points are pulled into the system to evaluate eligibility,” he says, adding that rural areas closer to vegetation and farther from fire stations are the most likely to be affected.
The Insurance Services Office (ISO) score, which evaluates the effectiveness of local fire departments, is another critical factor. Fortunately, Globe’s fire department has a high ISO score, reflecting its preparedness and training.
“Our community definitely benefits from having a highly trained fire department,” Storms pointed out.
Both insurers and local governments are emphasizing the importance of fire mitigation. Shipley points to efforts in Globe, such as the city’s collaboration with the Forest Service to clear vegetation and establish fire lines. The city also constructed a helicopter pad for fire response, ensuring faster access to water during emergencies.
Storms encourages homeowners to take proactive measures to protect their properties.
“Simple steps like clearing vegetation, following firewise guidelines, and staying updated on your policy can make a big difference,” he advises. “Maintaining a relationship with your insurance agent is also crucial—they can help you navigate changes and find potential discounts for mitigation efforts.”
The stakes are high for Globe. Without affordable and accessible home insurance, property values could decline, and residents might be forced to leave the area.
“If insurance doesn’t cover homes, people won’t buy them,” Storms warns. “We risk losing important community members.”
The challenges also extend to the business sector. As Shipley notes, commercial insurance has faced similar restrictions, which could hinder economic growth and deter new enterprises from setting up shop in Globe.
While the situation is daunting, there are reasons for optimism. Local initiatives, like those led by the Globe Fire Department and city council, are making strides in wildfire prevention and response. The Arizona Department of Insurance and Financial Institutions offers resources for homeowners, including the Arizona Municipal Risk Retention Pool (AMRRP), which can help those struggling to find coverage.
Looking ahead, Arizona’s Resiliency and Mitigation Council—a group comprising government agencies, firefighters, researchers, and insurance professionals—is studying long-term solutions to the state’s wildfire challenges. Their findings, expected in 2025, could pave the way for innovative policies and practices.
The changing insurance landscape serves as a stark reminder of the interconnectedness between natural disaster risk and the insurance market. For Globe, the path forward will require collaboration between homeowners, insurers, and local governments. By investing in fire mitigation, maintaining strong fire department capabilities, and staying informed, the community can navigate these challenges and work toward a more resilient future.
For homeowners concerned about their coverage, the message is clear: stay proactive, stay informed, and stay engaged with your local insurance agent. Together, Globe can weather this storm.
Carissa Pool is an Arizona native who grew up in Glendale and now lives in Peoria. Carissa earned her bachelor of arts degree from Arizona State University West and in her 15-plus year career in marketing and public relations has worked with a range of clients across various industries, from construction to non-profits. While she takes great pride in her professional achievements, her greatest joys come from writing and cherishing her role as a mother to her two young daughters.
