Wildfires and Insurance

As many as 90 percent of wildland fires in the United States are caused by humans, according to the U.S. Department of Interior. Some human-caused fires result from campfires left unattended, the burning of debris, negligently discarded cigarettes and intentional acts of arson. The remaining 10 percent are started by lightning or lava.

Over the 20-year period, 1993 to 2012, fires, including wildfires, accounted for 1.7 percent of insured catastrophes losses, totaling about $6.5 billion, according to the Property Claims Services (PCS) unit of ISO. The term “catastrophe” in the property insurance industry denotes a natural or man-made disaster that is unusually severe. An event is designated a catastrophe by the industry when claims are expected to reach a certain dollar threshold, currently set at $25 million, and more than a certain number of policyholders and insurance companies are affected.

Damage caused by fire and smoke are covered under standard homeowners, renters and business owners insurance policies and under the comprehensive portion of an auto insurance policy. Water or other damage caused by fire fighters to extinguish the fire is also covered under these policies. In California the California FAIR Plan covers residential and commercial properties located in brush and wildfire areas. Properties in those areas are subject to higher rates due to increased risk of fire.


  • Recent Research: A 2015 study by CoreLogic identifies almost 900,000 residential properties across 13 states in the western U.S. currently at high or very high risk of wildfire damage. They represent a combined total property value estimated at more than $237 billion. Of the total properties identified, 192,000 homes fall into the very high risk category, with total residential exposure valued at more than $49 billion.
  • California, Colorado and Texas are the states with the largest number of properties categorized as very high risk, with a combined property value exceeding 36 billion. The exposure jumps to $188 billion when properties at high and very high risk are included.
  • The cost of fighting wildfires reached $3.5 billion per year from 2002 to 2012 according to a report by Headwaters Economics, a nonprofit Research group.
  • Harvard School of Engineering and Applied Sciences researchers have concluded that by 2050 the number of wildfires in the West could rise by 50 percent, and across the U.S. the number would double.
  • 2015 Wildfire Season: Between January 1 and June 1, 2015 there were 21,648 wildfires in the U.S., which burned 397,136 acres, according to the National Interagency Fire Center.
  • 2014 Wildfire Season: Over the past 20 years the 2014 wildfire season ranks second only to 2013 for the lowest number of fires and acres burned.
  • In 2014 there were 63,312 wildfires which burned over about 3.6 million acres.
  • The Happy Camp Complex fire in California burned over 134,056 acres.
  • The Carlton Complex fire in Washington state burned over 256,108 acres and was the largest fire in the state to date.


Researchers are discovering that embers blown by the wind during wildfires cause most of the fires that burn homes. Also, homes that are less than 15 feet apart are more likely to burn in clusters. In such cases, fire is often spread by combustible fences and decks connected to houses, a study by the Institute for Business & Home Safety (IBHS) found.

The risk of wildfires is likely to continue to grow as temperatures rise, lengthening the fire season, and more people move into steep forested areas once largely uninhabited. Thirty-eight states have wildfire risks, according to IBHS, and the risk of wildfires keeps growing as more homes are built in wildland areas, some five million in California alone. Among the preventive features recommended in the IBHS study were noncombustible siding, decking and roofing materials; covered vents; and fences not connected directly to the house. In addition, combustible structures in the yard such as playground equipment should be at least 30 feet away from the house and vegetation 100 feet away.

Courtesy of iii.org.

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