Verisk Insurance Solutions, a Verisk Analytics company, has produced data that highlights the potential for significant wildfire risk across the U.S., with 4.5 million homes in the country at high or extreme risk of wildfire.
Verisk has published its 2017 FireLine State Risk Reports, which examine wildfire exposure in 13 states susceptible to wildfires. The reports show that despite above-average precipitation and reduced drought conditions in California and other parts of Western U.S., a substantial volume of homes are at risk of wildfire.
Wildfires can be extremely damaging, far-reaching and costly, and while insurance and reinsurance protection does cover the peril, data such as this should go someway to providing re/insurers with a more accurate and comprehensive view of U.S. wildfire risk, ultimately helping to establish more affordable and effective solutions.
Specifically, the report finds that 4.5 million U.S. homes are at high or extreme risk of wildfire, with over 2 million, or 44.4% being located in California, the highest in the U.S. After California, the state of Texas ranked second with 715, 300 homes at high or extreme risk of wildfire.
According to the reports, Montana and Idaho have the highest percentage of homes at high or extreme risk of wildfire, at 28% and 26%, respectively. And seven out of the 13 states have 13% or more of households at high or extreme risk of wildfire.
Dr. Arindam Samanta, Director of Product Management and Innovation, Verisk Insurance Solutions, said; “Wildfires have scorched nearly 3.5 million acres so far in 2017, according to the National Interagency Fire Center. For the first half of 2017, the number of acres burned by wildfires is up 34 percent over 2016 and the ten-year average.
“Wildfires have generated more than $5.1 billion in insured losses in the last decade – with $3 billion alone in just the past five years. These fires represent one of the leading catastrophe exposures facing the industry today.
“The ability to accurately identify the true wildfire exposure is critical to maintaining cost-based pricing. It also allows insurers that may have avoided the marketplace to explore expanding their book of business in these hazard areas.”
The reports were produced using FireLine, Verisk’s wildfire risk management tool, which uses remote sensing, machine learning and mapping technology to understand and assess wildfire risks, including contributing factors such as fuel, slope, and site-access.
