Some California homeowners may be covered again after wildfires

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Thousands of California residents who can only purchase home insurance policies through the state’s last resort insurance program will now be eligible for farmer insurance coverage.

Farmers’ ability to offer insurance is tied to a partnership with startup Zesty.ai, which will enable farmers to use artificial intelligence incorporating high-resolution aerial imagery, code and building material data, and details. location to instantly assess the risk of an individual property. losses from forest fires, said Attila Toth, founder and CEO of Zesty.ai.

Farmers expect to add about 30,000 policyholders over the next year thanks to the technology. The insurer is one of the state’s largest carriers, with more than 1.5 million residential policyholders in California. Many insurers have pulled out of wildfire-sensitive communities, sending homeowners to the California FAIR Plan for their coverage.

Farmers will continue to use a long-standing model that assesses the forest fire risk of the geographic area around a property, said Keith Daly, president of Personal Lines for Farmers. By adding Zesty.ai’s technology, the insurer will be able to take a more targeted approach, he said. While a particular area may present a higher fire risk, a property in that area may not present the same level of risk.

“We’re trying to create a solution” for homeowners who are having trouble purchasing insurance, Daly said.

The California Department of Insurance recently looked at farmers’ use of Zesty.ai’s technology in what officials said was the first such review related to wildfire underwriting.

“As the insurance industry continues to take into account race and discriminatory practices,” the state seeks to ensure that algorithms used for underwriting and rating purposes neither introduce nor perpetuate bias, a said Michael Soller, assistant commissioner of the California Department of Insurance.

“With farmers pledging to write at least 30,000 new policies for homeowners at higher risk to wildlife using this new tool, we’re happy to see the pendulum swing the other way,” he said. Mr Soller said.

Zesty.ai, founded in 2015, is one of many companies trying to help home insurers find better ways to assess applicants’ fire risk. Some other carriers in California and elsewhere are using or experimenting with artificial intelligence.

In May, Hippo Enterprises Inc., a home insurance technology company, said it will expand its use of geospatial imagery and technology by leveraging new insights from real estate data company CAPE Analytics to better understand risks, including forest fires. Hippo said geospatial analysis can identify continuous ownership changes and allow insurers to reach out to clients early on to make recommendations on actions such as clearing surrounding brush or pruning tree branches in. overhang.

In March, Zesty.ai announced a partnership with a unit of Cincinnati Financial Corp.

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, which makes him one of the firm’s new clients.

Write to Leslie Scism at [email protected]

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