Wildfire Recovery: The Critical Role of Debris Removal Coverage

Debris Removal Is a Big Deal

Former Governor John Hickenlooper described his first flyover view of the devastation of the Waldo Canyon neighborhoods on June 26, 2012, as looking like a world war, postbombing firestorm. Others described it as a moonscape with 347 houses burned into their foundations. My first view was a news report within a day or two of the fire, which looked terrible but not as dramatic as described above.

My view changed about a month later when I traveled to the neighborhood to witness the devastation myself. My perspective changed from terrible to horrific, realizing not just physical loss but understanding that real people had lost virtually everything. It provided a new realization that debris removal and the eventual recovery were a much bigger task than I had initially anticipated when I volunteered to assist the survivors.

What Is Debris?

What constitutes debris? Debris is whatever solids remain after a fire. Generally, when structures burn, they leave minimum ash to be cleaned, unlike the debris following a tornado or hurricane event. The most problematic is all the personal property residue of ash and metal from the fire, whose chemical makeup is unknown. Another early question is whether the houses contained asbestos or other known carcinogens requiring special mitigation and removal. Can the residents safely recover any unburned objects or memories from the ashes before debris removal? Two additional critical issues are securing the site for liability and minimizing debris migration by wind and water.

Besides the visual impact on wildfire survivors, there is also a hidden psychological response that is important to recognize before debris removal can commence. Wildfire survivors in each incident I was involved in want to make sure there are no hidden surviving mementos that may bring them closure. It was amazing to see the type of objects recovered in their burned-out basements by sifting the ashes looking for various memories. Despite the overwhelming evidence of destruction, survivors usually found a handful of objects that would help them remember their pre-fire lives (e.g., jewelry, ceramics, or occasional photos). From a recovery perspective, it is crucial to allow the victims an opportunity to bring closure to make sure any recoverable items are found.

In a postwildfire setting, other debris removal must be addressed before rebuilding can begin. In each of the fires, it was impressive to see the number of vehicles that were totaled by fire, which usually require a different removal process than the remainder of the real and personal property. Another safety concern is locating and securing the underground utility lines. A couple of other classes of property raised questions of who was financially responsible for disposing of damaged trash receptacles and melted postal boxes.

Within the first month, another previously held myth was discredited: Concrete never burns or is damaged by heat. Concrete either burns or is seriously degraded by intense fires. Concrete foundations have rebar embedded in them, which can expand and contract in excessive heat. It was estimated that the heat generated by this fire in the homes' basements exceeded 2,500 degrees, which is more than enough to affect the rebar. This process degrades the concrete foundation's integrity and needs removal. To verify this degradation claim, professionals or contractors strike the foundation with a ball peen hammer, resulting in the concrete's crumbling. I had never encountered this phenomenon in my prior claims and agent experiences. This added damage required a two-step permitting process: one for debris removal and the other for structural (foundation) demolition.

While this article focuses on debris removal in a postwildfire setting, agents and insureds must consider three other important factors when evaluating debris removal costs. First is the distance to the disposal site. Second are any local codes that may add costs to removing debris following any disaster or claim. Finally, what is the volume of debris expected post-loss? If you have a total loss where the property is not destroyed (i.e., tornadoes, hurricanes, or water damage), the volume of debris will increase significantly, adding to the removal cost.

Each debris removal event varies according to the specific factors of the claim or catastrophe and the locale in which it happens. Still, there is one common denominator: The faster it is done, the better it is to remove the constant reminder of the disaster and to demonstrate that recovery is underway. Let's explore the different processes used to remove wildfire debris in the three Colorado wildfires in which I was involved.

Waldo Canyon Fire Debris Removal Strategy

The City of Colorado Springs established a public-private partnership (P3), ¹ Colorado Springs Together (CST), to oversee the recovery from this wildfire. My volunteer role was to assist the team and survivors with insurance questions that arose during my 1-year tenure on the team. One of my first tasks was to be selected to serve on a task force to address the process and schedule for cleaning the debris from the home lots in the Mountain Shadows neighborhood where the fire occurred. This task force included a local general contractor, a Colorado Springs Fire Department representative, the Colorado Springs emergency manager, an El Paso County Health representative, and a Pikes Peak Regional Building Department representative.

Initially, our focus was designing a program where a single contractor would clean all the debris to minimize multiple contractors in a dense neighborhood setting. An early hurdle to this process was paying for this removal, especially when each homeowner had different insurers that may wish to find a more cost-effective way to remove the debris. Within the first month, CST hosted a debris removal demonstration for residents, media, and company representatives to evaluate the established process, which followed all the code and permitting requirements in force.

I was amazed at the various steps required for safe removal (e.g., watering the debris field down before and after, setting up security fences, personnel dressed in special protective equipment with respirators, or lining the trucks). Fortunately, we had one less hurdle to jump with the removal since the neighborhood was less than 25 years old—there were no additional requirements for dealing with asbestos debris.

By the time the residents had estimates from the community-wide method, many survivors and their insurers had found excavation contractors to compete with the neighborhood approach. The neighborhood approach was generally a higher cost, so the CST agreed to let each affected homeowner decide on contracting for their debris removal, either the community or private contractor approach. However, CST asked all affected residents to perform their removal by the end of October 2012. This debris removal timeline worked well—by the end of October, there were about 15 homes left that either needed debris removal or foundation demolition. By year's end, the community had just a couple of homes that had not complied with these timelines. Peer pressure from neighbors and friendly persuasion by city or team officials led to this great outcome. Indeed, CST and the neighborhood launched a rapid and complete rebuild.

Why did this debris recovery occur so quickly? While it certainly is a function of the P3 team approach, it is also a testament to the five affected homeowners associations and the availability of local contractors following the 2008 national recession. It also is a testament to the Colorado Springs community to support this recovery endeavor.

Black Forest Fire Debris Removal Strategy

Unlike the Waldo Canyon Fire, the Black Forest Fire occurred in an incorporated rural area of El Paso County 25 miles northeast of Colorado Springs. Generally, the affected homes were on larger lots and less densely situated than those in the Waldo and Marshall Fires. From the recovery onset, the county elected to run the recovery and hired a consumer advocate group to assist. A local group on which I served tried to organize a recovery team like the CST. Still, for many reasons, Black Forest Together never achieved similar results. They needed to compete with the county and did not have the same pool of community leaders to serve on a recovery team. Consequently, my team's involvement was limited to providing individual homeowners with counsel on their claims process and available coverage and working with Waldo Canyon survivors to help the Black Forest survivors.

Debris removal followed a completely different trajectory than that at Waldo Canyon. First, the county arranged for trash containers to collect the remaining metal debris so the residents, neighbors, and friends could begin the cleanup. While residents may have done some complete removal with farm or contracting equipment, most debris removal and foundation demolition were done by private contractors retained by the survivors.

There were two very different hurdles that the Black Forest residents faced.

• Many residences had multiple buildings that were often underinsured, for which the policy debris removal limit was insufficient.
• Many trees that fell outside the tree debris removal sublimits were destroyed. Removing 2–5 acres of trees is expensive and is not contemplated when most policies are written.

This more relaxed debris removal process had no timelines, which eventually had consequences. Residents who were rebuilding faced living beside homes where the debris was not fully removed and burned trees not cleared. Although I have seen no direct data on when the home debris was finally cleared, it took much longer than the 90 days at Waldo Canyon. As recently as 2023, there were areas of dead trees in the burn scar that had not been cleared.

This more laissez-faire approach to debris removal is likely a cause of the slower and less complete recovery of the destroyed homes.

Marshall Fire Debris Removal Strategy

My involvement in assisting the Marshall Fire survivors was delayed, so I was not directly involved with this fire's debris removal. This urban fire was like the Waldo Canyon Fire in that it was a fast-moving, wind-driven fire that destroyed many homes quickly. It was dissimilar because it burned homes in three separate political entities of Colorado: unincorporated Boulder County, the city of Louisville, and the town of Superior. Because the two incorporated entities involved were in Boulder County, having the county's Emergency Management Department lead the recovery effort made sense, as did contracting with various other nonprofit subcontractors. However, the two municipalities attempted community teams as Colorado Springs had done but never had the community support or traction as CST had.

Based on my information before my involvement, the Private Property Debris Removal Program (PPDRP) was developed and coordinated mainly by the county, using funding from the Federal Emergency Management Agency (FEMA) on the front end. These programs have been used in other wildfire settings, and the funding is 75 percent FEMA, with the remainder from the state or local government. If survivors opted into this program, they agreed to permit the program to subrogate the individual property owners' insurance policy for their debris removal limit covered by their insurer.

This community program was not mandatory, and each affected property owner could opt out of this process, using their own excavation contractor instead. Based on information from the Boulder County Emergency Management, the PPDRP process was elected by 566 wildfire survivors, which seems to be a low uptake considering the significant underinsured properties in this wildfire. Perhaps the added required paperwork or the sense of control motivated almost half of the other survivors to elect to have the work done by a contractor of their choice. It also may suggest that this survivors' group had adequate debris removal limits to do the job with no additional out-of-pocket expense.

Like most governmental programs, they take time, and there are stricter rules for seeking contract bids. Based on information from The Denver Gazette, the community cleanup program commenced sometime during April 2022. ² It was completed by the third week of August 2022, meaning it took more than twice the time to clean after the Marshall Fire than the timelines experienced in the Waldo Canyon recovery. This slower outcome adds time to the eventual recovery and remains a more extended reminder of the community's catastrophic loss. It is difficult to assess the impact of the slower debris removal on the overall recovery, especially since many homeowners found themselves underinsured. ³

Personal Lines Debris Removal Coverage

Most homeowners and dwelling policies grant debris removal coverage under the additional coverage portion of the policy. Assuming the underlying dwelling and personal property limits are exhausted, these policies make an extra 5 percent of the exhausted limit available for debris removal. This coverage assumes that the insured property was totaled. Generally, companies usually extend this beyond the Coverage A dwelling limit. However, some companies will include Coverage B (additional structures) and Coverage C (personal property) when calculating this benefit. If there is no coverage A or B limits, any debris coverage would be computed using the personal property limit. Company claims-handling practices also differ when the amount is paid. All policies set further lower limits on removing trees and landscaping materials, and no soil removal is covered.

Technically, the payment of policyholders is not owed until the debris removal work is complete and for the actual amount of the removal work. However, in all three fires, some companies paid this up front to facilitate the early stages of the claim and reduce the amount of work the insured needs to do to obtain competitive quotes. It was not uncommon for the debris removal to be arranged with the eventual rebuild contractor, although, in most cases, the excavation and demolition work was done by separate contractors. Based on the above three wildfires, I did not witness nor hear of any structural and contents removal instances for which insureds were underinsured. One major underinsurance case involved removing trees following the Black Forest Fire.

How should a customer or agent assess the adequacy of this simple personal lines limit for granting coverage? If the company makes such coverage available, how should an agent sell higher debris removal limits? Most customers and agents never expect to experience a total loss from an individual or natural catastrophe. Because of the low probability of a total loss, this limit is rarely discussed, and sometimes an insurer can increase these limits. As natural disasters increase in severity, agents have an excellent opportunity to show their professionalism by pointing out potential gaps in coverage at the point of sale rather than awaiting an uncovered claim. To make this conversation more meaningful, it is helpful for agents to understand how debris removal works in the insurance contract and how it applies in the real world. The following are four potential factors that may increase the possible threat of an uninsured debris removal claim.

• Do they reside in an area with a higher risk of wildfires, tornadoes, floods, and earthquakes?
• Will the debris need to be transported at a distance greater than 25 miles for disposal, which will add to both transportation costs and perhaps dumping fees?
• Are their buildings constructed of materials (e.g., asbestos or lead) that will significantly increase the removal costs?
• If they live on a property with many trees, an early disclaimer of tree removal would minimize hard feelings if such a future claim were to occur.

I am unaware of any objective methods to quantify a customer's exposure to a debris removal coverage gap better. As new catastrophic modeling tools evolve, the insurance industry may help minimize this exposure further. However, based on my experiences in these three wildfire recoveries, the written policies with a 5 percent debris removal limit were adequate to cover the real and personal property cleanup.

Commercial Lines Debris Removal Coverage

My recovery focus in the three fires was personal lines. As noted above, very few commercial properties were lost in these disasters. As I reach out to my fellow agents and industry professionals, it is essential to contrast how debris removal is handled under the standard insurance industry commercial property forms. Removal is treated under the additional coverage part of the policies with the following three critical differences.

• It adds time limits and exclusions to the type of property covered by this coverage.
• It only pays $25,000 (or some other fixed amount) over the total building limit for debris removal.
• It will pay up to $25,000 if the total debris removal amount exceeds 25 percent of the deductible plus the direct physical loss amount.

These limitations could adversely impact your commercial clients if they are not made aware of them at the time of sale rather than after the loss. Fortunately, endorsements are available to customize these limits for customers' risk exposure, but this requires an assessment of their potential exposure to such loss. Unfortunately, I am unaware of any objective measures to assist customers with finding the proper limits for this coverage. Considering the low probability of loss but the high potential coverage gap, the insurance industry needs to find better tools for customers to quantify their exposure, or they need to amend their policy forms like the personal lines approach to make debris removal a percentage of the property limits.

Conclusion and Parting Thoughts

These wildfires made me see the importance of what my fellow insurance agents were advocating before my involvement in these Colorado wildfires. Debris removal does matter in a postdisaster setting, even though very few people think of its potential application until the event happens. There is no substitute for real-world learning in the insurance world and recognizing the importance of sharing these stories to help our industry better address their customers' needs following these horrific events.

The good news is that the debris removal coverage in these incidents worked remarkably well from an insurance contractual perspective. If there was a weakness, it was the speed with which the cleanup took place. Cleanup delays increase the overall cost of the other claims associated with rebuilding after a wildfire loss. Are there solutions to increasing the speed of this process after the wildfire is extinguished? I believe there are solutions to this issue as the insurance industry and other public and private stakeholders look for pre-loss and post-loss mitigation measures. The following are four preliminary ideas.

• Insurers should consider prestaging excavation and demolition contractors similar to how they handle water claims with restoration contractors.
• Insurers should consider working with state or local entities to develop more straightforward templates to implement following a catastrophic loss to initiate the process rather than reinventing the process for each event. It is recognized that some tweaking may still be necessary, but if the timelines can be shortened to arrive at the final process, it is a win-win for everyone.
• The industry needs to implement improved communication of debris removal costs among agents, underwriters, and claims personnel so everyone is on the same page. Without this information, there should be greater flexibility in addressing any coverage gaps for this claim cost.
• As noted above, the industry must address the potential for severe debris coverage gaps identified for commercial customers.

The bottom line is that debris removal matters most to the wildfire survivors as a sign that the recovery is on track! Also, the next time you see a neighborhood decimated by wildfire shown on TV or social media, imagine its smell, look, and feel, as well as recognize that many people are suffering from post-traumatic stress disorder symptoms. Our job is to facilitate their recovery as wholly and expeditiously as possible!