Wildfire Risk Exposes $1.4 Trillion in U.S. Property Value
Event summary
- 2.5M+ U.S. properties in 10 western states face moderate or greater wildfire risk, with $1.4T in reconstruction cost value (RCV) exposed.
- California leads with 1.28M at-risk properties ($850B RCV), but Colorado and Texas alone account for nearly 560K properties ($252B RCV).
- Conflagration risk—home-to-home fire spread—can add up to 40 points to traditional wildfire risk scores, revealing overlooked vulnerabilities.
- Top 10% of homes by mitigation score have expected losses 78% below statewide averages; bottom 10% face losses over 10x higher.
The big picture
Cotality's report highlights a growing disconnect between legacy risk models and the evolving dynamics of wildfire exposure. As conflagration risks reshape property valuations, insurers face pressure to refine underwriting criteria while homeowners weigh mitigation investments. The $1.4T exposure figure underscores the systemic financial stakes in adapting to climate-driven hazards.
What we're watching
- Underwriting Evolution
- How insurers will adapt to conflagration risk assessments and expand underwriting footprints.
- Resilience Incentives
- Whether homeowners will invest in fire-resistant upgrades as mitigation scores gain prominence.
- Geographic Shifts
- The pace at which wildfire exposure spreads beyond traditional high-risk zones into lower-scored neighborhoods.
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