Catastrophe risk modeller CoreLogic has released its Wildfire Risk Report for 2020, which finds that 1,975,116 homes in the U.S. with an associated reconstruction cost of over $638 billion are at an elevated risk of wildfire damage.
According to CoreLogic’s analysis, these homes are comprised of approximately 6.5% of the total number of single-family residences in states along the West Coast.
The Los Angeles metro area tops the list of metropolitan areas with the greatest single-family residences at wildfire risk, followed closely by the Riverside and San Diego metro areas. CoreLogic notes that California is home to 76% of these residences on the top 10 list of metro areas by single-family residence at risk, but adds that the reconstruction cost value of these homes consists of almost 84% of the list.
The devastation in Oregon, Washington and California created by the wildfires has caused the loss of both dozens of lives and thousands of structures, and recovery will be a continuous process that can take years.
Cities such as Santa Rosa, home to the Tubbs Fire in 2017, and Paradise, where the Camp Fire took place in 2018, are still in the process of rebuilding.
So far in 2020, the COVID-19 pandemic has created numerous additional complications and with the potential for disruptions to the supply chain for raw materials, manufacturing and transportation, this effort could be further challenged.
Because of the influx of claims and fewer adjusters to review damages automation and virtualisation more critical than ever to supporting policyholders due to the challenge of insurance activities.
Tom Jeffery, the principal hazard scientist at CoreLogic, commented: “2017 and 2018 were incredibly destructive, record setting years for wildfire, followed by a comparatively quieter 2019. When we talk about wildfire trends, it’s important to treat any decrease in fire activity as only temporary.
“Like most natural hazards, there is no reason to believe that the amount of wildfire acreage, or the number of homes in the path of future wildfires will be any less – and certainly the ongoing 2020 season is proof of that, well on its way to being among the most devastating in recent memory.”
Mick Noland, the Executive General Manager for Insurance Solutions at CoreLogic, added: “The business landscape is changing to right-size today’s challenges. Wildfire risk presents a case study for this. A single event can completely destroy a home. It is critical for insurers to have a complete view of each unique property to ensure adequate coverage and support in the wake of a catastrophe.
“Next-generation integrated insurance solutions, based on a foundation of granular data and insights, are the key to protecting families and businesses – and ultimately, the health of the housing ecosystem – from the threat of financial catastrophe.”
