Extra layer of protection for ultra-wealthy
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Doug Krizner: A huge wildfire is burning near the resort town of Ketchum, Idaho. It’s already spread across more than 60 square miles, threatening lavish homes with a total value of nearly $4 billion. One insurance company responsible for covering 22 of these exclusive properties is joining the fire fight. Here’s Elizabeth Wynne Johnson with more:
Elizabeth Wynne Johnson: Ketchum, Idaho is home to the venerable Sun Valley resort. It’s amagnet for people who like their mountain getaways to be as inaccessible as possible.
Tom Futral: People come to get away from everybody and that’s why some of these trees are so close to the residences. I mean, you’ve got to admit these are beautiful, beautiful residences.
That’s Tom Futral. He doesn’t have much time to admire the architecture of some of these houses. That’s because he’s been contracted by insurance company AIG to save them.
Futral: As you can see, there’s ashes already all over this deck.
As he works, smoke billows down from the hill above. He sprays the home and its surrounding cluster of blue spruce with a clear, virtually odorless liquid. It’s a flame retardant like the stuff fire crews dump from planes, minus the red tint. Futral says a thin film will keep this multi-million dollar retreat flame-free.
Futral: Total protection. Total protection.
That’s peace of mind for the homeowner and for AIG. It created this service for what it calls ‘high and ultra-high net worth” clients in forested hot spots in California and Colorado.
Idaho’s Sun Valley is getting the treatment for the first time this year. That’s because AIG insures almost 200 homes threatened by this fire. If things go badly, the company could face monster claims.
Dorothy Sarna is vice president and national director of risk management. She says there’s a market for this kind of service because patterns of growth have created more hazardous living.
Dorothy Sarna: People are building homes in areas where we didn’t used to build homes. People are building bigger homes on the coastline, for example. They’re building homes that back up to national forests.
Living so close to wilderness has obvious benefits and prices to match. But the risks are costly too, which makes a cloak of inflammability look like a real bargain — to homeowners and their insurance companies.
I’m Elizabeth Wynne Johnson for Marketplace.
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