Insurance Refusals and Wildfire Risks

# COMMISSIONER OF SECURITIES AND INSURANCE James Brown Commissioner Office of the Montana State Auditor ## ADVISORY MEMORANDUM To: ALL LICENSED PROPERTY AND CASUALTY INSURERS From: James Brown Commissioner of Securities and Insurance, Office of the Montana State Auditor Date: July 2, 2025 ### Advisory Memorandum Regarding Insurance Refusals and Wildfire Risks An active wildfire season continues to impact the Montana insurance marketplace. Previous Insurance Commissioners have relied on an advisory memorandum originally issued in 2000 that prohibits insurance companies from refusing to issue policies in areas which do not have a substantially increased risk of loss due to wildfires. This prohibition protects Montana insurance consumers from unfair discrimination. James Brown, Commissioner of Securities and Insurance, Montana State Auditor, hereby restates this prohibition to protect insurance consumers. This office has recently received complaints from consumers and agents regarding property and casualty insurers refusing to write new or increased coverage due to the alleged risks of wildfires in Montana. Many of these complaints have come from areas not threatened by wildfires, including within the city limits of developed cities and towns. For example, we are aware that some insurers have refused coverage for properties in Helena because of the Rimini area fire. Section 33-18-210(7), MCA, states: "An insurer may not make or permit unfair discrimination between individuals or risks of the same class and of essentially the same hazards by refusing to issue, refusing to renew, canceling, or limiting the amount of insurance coverage on a property or casualty risk because of the geographic location of the risk, unless: (a) The refusal, cancellation, or limitation is for a business purpose that is not a mere pretext for unfair discrimination; or (b) The refusal, cancellation, or limitation is required by law or regulatory mandate." Any refusal to issue or renew, or any cancellation or limitation on the amount of property or casualty insurance based on the threat of wildfires and which involves property that does not have a substantially increased risk of loss due to wildfires will be investigated for violation of the Montana Insurance Code. This office will aggressively pursue any such violation of this statute. 840 Helena Avenue, Helena, Montana 59601 (main fax) 406.444.3497 | (securities fax) 406.444.5558 (policyholder services fax) 406.444.1980 | (legal fax) 406.444.3499 Advisory Memorandum Regarding Insurance Refusals and Wildfire Risks July 2, 2025 Page 2 Insurers are expected to make decisions concerning the issuance, renewal, cancellation, or changes in coverage of property and casualty insurance on a case-by-case basis and with reference to the degree the property involved is actually threatened by wildfire. Commissioner Brown urges anyone who knows of insurers refusing to issue or renew, cancelling, or limiting the amount of property or casualty insurance based on the alleged risks of wildfires in Montana to report to the CSI. Reports can be made online, by calling the Insurance Consumer Services (ICS) Bureau at (406) 444-2040, or by emailing ics@mt.gov. **This advisory memorandum is informational only and does not enlarge, delimit, or otherwise modify any requirements of applicable law or in any way limit the authority of CSI under applicable law. CSI encourages interested persons to consult with independent legal counsel for guidance on the application of law to any particular circumstances.** 840 Helena Avenue, Helena, Montana 59601 (main fax) 406.444.3497 | (securities fax) 406.444.5558 (policelholder services fax) 406.444.1080 | (legal fax) 406.444.2400