New property-level data reveals how fire spreads between homes, offering insurers and homeowners a critical opportunity to identify extra steps that can be taken to reduce risk and enhance resilience, according to a recent Cotality report.
Cotality’s 2026 Wildfire Risk Report found that over 2.5 million properties across the 10 most exposed states in the west of the United States carry a moderate or greater risk of wildfire, representing a combined reconstruction cost value (RCV) of nearly $1.4 trillion.
The findings emphasise four key factors — risk assessment, property-level mitigation, insurance coverage, and dynamic landscape changes — that show how localised wildfire risk can escalate into broader exposure.
California leads wildfire exposure with 1.28 million at-risk properties ($850 billion RCV), though 49.9% of top-10 state exposure is outside CA. Colorado and Texas comprise nearly 560,000 properties ($252 billion RCV), almost equaling the combined $277 billion RCV of Oregon, Arizona, Idaho, New Mexico, Montana, Washington, and Utah.
Los Angeles is the most exposed metro (nearly 250,000 properties, $209 billion RCV), but four of the top ten metros sit outside California. Austin leads these with over 100,000 properties ($49.2 billion RCV), followed by San Antonio, Denver, and Spokane.
Cotality’s modeling demonstrates that conflagration — when the fuel for fire moves from wildland into a neighborhood, spreading home to home — is expanding the footprint of wildfire exposure and revealing a significant vulnerability that traditional risk models can overlook.
According to Cotality, layering conflagration potential onto traditional risk scoring wildfire models can increase a property’s risk rating by up to 40 points, pushing meaningful hazard risk deep into neighborhoods legacy maps previously classified as low risk.
According to Cotality’s property-level mitigation score — which evaluates community protections, parcel conditions, and structural fire resistance — homes in the top 10% carry expected losses roughly 78% below the statewide average.
The bottom 10% runs more than 10 times that average — about $47 in expected loss for every $1 on the best-prepared homes.
Jamie Knippen, Cotality’s director of hazard insights, stated: “Hearing that a property has a higher risk score than previously thought should not be thought of as a bad thing. It shows that new data and analytic capabilities create an opportunity to protect properties more effectively in the evolving wildfire environment we’re facing.
“This represents a significant opportunity for the entire market: it empowers carriers to move away from broad-brush risk assessments and safely expand their underwriting footprint, and actively rewards homeowners who invest in resilience.”
Knippen highlighted: “New property-level data now empowers insurers to identify what additional steps homeowners can take to mitigate the risk on their properties and leverage that additional resilience in their decision making.
“Expanding the assessment means going beyond terrain and vegetation to look at factors like structure density, building materials, wind patterns and ember exposure. Carriers that account for these factors upfront can make sure homes are properly insured for the catastrophe they actually face — not just the forest fire, but the fire next door.”
