AIG, Other Insurers Offer Fire-Prevention Aid

The intense West Coast wildfires started early this year, but some residents are at more risk than others of paying a high price to repair or rebuild their homes than others.

Thousands have been evacuated from homes in Washington and California, where wildfires have been severe enough to prompt Gov. Arnold Schwarzenegger to declare a state of emergency in 12 counties and ask the National Guard for firefighting assistance for the first time in more than 30 years.

Powerful fires that spread across dry, wooded areas throughout the West have pushed more homeowners to take preventive steps in recent years. One especially useful measure is spraying fire retardant on the brush surrounding the home, and on the home itself, to keep the flames at bay.

AIG's ( AIG) Private Client Group, which caters to the wealthy, offers this service for free to existing policyholders in five metropolitan areas: Aspen, San Diego, Los Angeles, Orange County and San Francisco Bay. Nearly 3,200 are now enrolled, compared with 1,200 in January 2007. The insurer says its enrollment levels spike each time there are large fires, like a 60% increase following blazes last fall.

AIG's loss-prevention team has contracted with a company called Firebreak Spray Systems, which sprays a phosphate-based substance called Phos-Check on all the brush within three miles of a residence. The home is sprayed only if a fire spreads beyond that parameter. AIG follows wildfires with a tracking system to determine whether any of the homes under its insurance are at risk.

The product has a chemical reaction with plant matter so that instead of lighting up, it creates water vapor and carbon dioxide when fire touches it. Todd Triano, vice president of loss prevention at the Private Client Group, says the retardant saved "a number of homes" in the fires that spread last October.

Still, AIG only offers the service to high-net worth clients whose homes have a value of at least $1 million, meaning that many others will have to take action on their own. The service costs about $1,000 for each spray session, but can still be cheaper than the damage caused when a fire engulfs the entire home.

There are other preventive measures to be taken before spraying the home with fire retardant as well.

Triano says it's important to have a good irrigation system and to get rid of non-native plants that surround the home. The more hydrated the vegetation, and the more natural it is to the area, the less likely it will burn. Expanding the "defensible space" around the home - the area without vegetation - can also help if a fire is heading toward the residence.

Finally, Triano suggests removing any debris from the roof or property that could ignite - including items like patio furniture. It's also important to make sure that any vents are not susceptible to embers flying inside and sparking a blaze internally.

"Most people live in the reality of the threat of wildfires in the West , so I think most people understand there is a threat," says Triano. "It's a question of what steps they are willing to take to prevent it."

The cost of an evaluation and services will vary depending on insurance coverage, the size of the home and the effort involved in installing an irrigation system or removing vegetation. Clearing some shrubbery or an old, dried up tree can cost a few hundred dollars, whereas clearing a large swath of vegetation can costs several thousand.

Homeowners should first check their insurance policy to determine whether the insurer offers any preventative services or referrals to outside contractors. Homeowners should also ensure that they are adequately covered in case of a devastating wildfire. If the policy covers the home at $500,000, but replacing the home would cost $750,000 and the contents cost another $250,000, it might not be sufficient.

While the cost of the preventive measures and insurance premiums might seem high, such initiative could ultimately be less costly -- and less devastating -- than losing a valuable home and all its contents.

"Anybody can write a check -- we have very fast hands that can write checks," Triano says. "But we've found out that most folks want to preserve their stuff rather than get a check."