ÐÓ°ÉÊÓƵ

Last Updated: 6/2/2025

Issue: Wildfires are a significant risk for property owners across the United States, with millions of properties at high or very high risk and total annual damage often exceeding a billion dollars. The frequency, size, and intensity of wildfires varies significantly by year, but many of the worst years for wildfires have been in the past decade. In 2023, the U.S. experienced 56,580 wildfires that burned approximately 2.7 million acres—substantially below the 10-year average of 7.2 million acres burned annually. This marks a significant decrease from 2020, when about 10.1 million acres burned—roughly the combined area of Massachusetts and Connecticut. A warns that the risk of highly devastating fires could increase by 50% by 2100 due to climate change and land-use changes. 

Overview:  Wildfires continue to pose a significant threat across the United States. All 50 states have experienced wildfire damage in the past decade, with the Central and Western states being most affected due to dry conditions, strong winds, and extreme heat. While natural causes like lightning account for some wildfires, human activities remain the predominant cause. Notably, in 2023, about 90% of the wildfires were human-caused, stemming from activities such as unattended campfires, discarded cigarettes, debris burning, and equipment malfunction. Human caused fires are often caught earlier and, therefore, losses are not as high as natural fires. This is most likely because human caused fires are started closer to habitable areas. 

Climate change has been linked to longer and more intense wildfire seasons. Warmer temperatures and earlier snowmelt contribute to drier conditions, extending the fire season. For instance, parts of the Western U.S. have seen an increase of 37 fire weather days on average between 1973 and 2024. 

The expansion of communities into wildland-urban interface (WUI) areas has increased wildfire risks. More people are moving into the WUI to take advantage of the privacy, natural beauty and affordable living. The population shift has contributed to new fire threats; as additional neighborhoods are built in rural areas, the potential for incurred losses grows. Between 1990 and 2020, the WUI area grew by 31%, and the number of homes in these areas increased by 47%. This growth places more people and properties at risk, especially as wildfires become more frequent and severe. 

Wildfire Mitigation:
(CWPPs) are collaborative efforts involving fire departments, forestry staff, land managers, community leaders, and the public to assess and mitigate wildfire risks in at-risk areas . These plans often include strategies like creating defensible spaces around properties and implementing land management practices to reduce fuel loads.

Protecting property from wildfire damage also involves proactive measures. Standard homeowners insurance policies, such as the ISO Homeowners 3 Special Form (HO-3), typically cover losses due to wildfires. Coverage includes the main dwelling (Coverage A), other structures like sheds or fences (Coverage B), personal property (Coverage C), and additional living expenses if the home becomes uninhabitable (Coverage D). It's important for homeowners to review their policies to ensure adequate protection against wildfire-related losses.

In response to the escalating threat of wildfires and other natural catastrophes, the ÐÓ°ÉÊÓƵ and its Catastrophe Insurance (C) Working Group have intensified efforts to address these challenges. Their initiatives encompass:

• Enhanced Coordination and Studies: Collaborating with various ÐÓ°ÉÊÓƵ task forces and working groups, including those focusing on earthquakes, severe convective storms, and wildfires, to study matters pertinent to state insurance regulators.
• Consumer Education and Resources: The ÐÓ°ÉÊÓƵ has developed resources to assist consumers in preparing for and responding to wildfires. These include guidance on creating defensible spaces around properties and understanding insurance coverages related to wildfire damage.
• Regulatory Guidance and Support: Providing technical feedback to Congress on proposals concerning natural catastrophes and assisting state insurance regulators through the ÐÓ°ÉÊÓƵ's Catastrophe Resource Center, which offers tools and information to better prepare for disasters.

As wildfire risks continue to rise, collaboration among stakeholders—including federal, state, and local governments; insurance regulators; fire protection agencies; insurers; and homeowners—is crucial to implement effective risk management strategies. The ÐÓ°ÉÊÓƵ emphasizes the importance of proactive measures and provides a suite of resources to guide consumers before, during, and after wildfire events.

For personalized insurance information and assistance, consumers are encouraged to contact their respective state insurance commissioner.