If Mitigation Reduces Wildfire Losses, Insurance Should Recognize It

A recent analysis from the California Department of Insurance (CDI) and the National Association of Insurance Commissioners (NAIC) found that rebuilding homes to stronger wildfire safety standards could reduce future losses by roughly one-third. For homeowners, insurers and policymakers, that should be a defining data point, not a footnote.

The reason is straightforward: Wildfire risk is not only a question of location. Hazard maps, ZIP codes, and proximity to vegetation all matter – but they do not fully explain why one home burns, and another survives.

Wildfire damage often begins when embers exploit vulnerabilities in a structure or its immediate surroundings. Those vulnerabilities can be reduced by addressing how structures ignite, limiting ember entry through vents and gaps, reducing combustible materials near the home, and hardening the structure against heat and ember exposure.

A home is not safer simply because it met a standard at a single point in time. Vegetation grows back, materials age, conditions change. If mitigation is going to influence insurance decisions, it needs to be verified, monitored, and maintained over time.

That is where the current system falls short. Homeowners may invest in reducing ignition risk yet still face limited coverage options or little recognition of those efforts in underwriting and renewal.

If California wants more resilient communities, mitigation must connect to insurability. Verified, property-level risk reduction should help shape coverage availability, pricing, and confidence in the market.

The goal should not be to predict which homes will be lost but to change the conditions that make loss more likely in the first place.

Link to CDI’S full briefing: https://www.insurance.ca.gov/0400-news/0100-press-releases/2026/upload/nr017CDIWildfireSafetyandInsurabilityBriefing032720262-2.pdf

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