Governing for fire in a high-risk century

By Robert Gordon

This is a lightly edited excerpt of testimony recently provided to the U.S. House’s Natural Resources, Federal Lands Oversight Subcommittee hearing titled, “Fix Our Forests: The Need for Urgent Action One Year After the L.A. Wildfires.”

Wildfire losses over the last decade were more than five times higher than in prior decades, with eight of the ten costliest insured wildfires globally occurring in the United States since 2017, and losses expected to rise further this decade following the record $40 billion Southern California wildfires last January and fires in recent years in Colorado, North Carolina, Tennessee, Georgia and Hawaii.

Importantly, increases in wildfires and conflagrations impact the cost of living, risks to lives and homes and economic factors — including the cost of insurance. These impacts can be diminished through improved mitigation and resiliency policies found in the Fix Our Forests Act.

For 50 years, insurers have led the development of building safety standards by funding the Insurance Institute for Business & Home Safety (IBHS), which creates evidence-based disaster mitigation standards such as FORTIFIED construction for wind risk and the Wildfire Prepared Home standard to reduce fire risk.

Fire is unlike other hazards, such as wind or flooding, in that it intensifies in the built environment as homes become additional fuel. Whether fires ignite in the natural or built environment, under extreme fire conditions, such as high wind events, only mitigated properties can slow this progression by eliminating fuel sources and pathways that enable the rapid spread of fire within communities. Though actions must be taken at the scale of entire neighborhoods or communities, not only individual parcels and vegetation maintenance must become an ongoing priority.

A December study by the IBHS and CAL Fire found that even homes with the top four fire resistant characteristics had less than a 50% chance of avoiding damage when neighboring buildings were within 10 feet, and that structures faced a 58% destruction risk with any combustible material in the immediate perimeter—rising to 87–100% when fuel coverage exceeded 25% of that zone. Following the destructive Camp Fire of 2018, which destroyed about 11,000 homes, the town of Paradise, California, opted to incorporate the IBHS Wildfire Prepared Home standard into its local building codes for all new and rebuilt homes.

Recent events in California offer an object lesson in the interrelationship between fire risk, regulation, mitigation, and insurance availability. California’s FAIR Plan, a residual market of last resort, where insurance is available to those seeking coverage that cannot be placed in the private market, has ballooned in size — quadrupling over recent years—because the state’s outdated regulatory system has severely suppressed rates while wildfire risk has escalated dramatically. In California, insurers face long delays in obtaining necessary rate approvals and have historically been barred from incorporating essential factors like reinsurance costs and forward-looking wildfire catastrophe models into pricing, leaving premiums artificially low relative to actual risk. This regulatory rate suppression has pushed many insurers to limit or withdraw coverage, forcing large numbers of homeowners, especially in high-risk wildfire areas, into the FAIR Plan.

In contrast, Dixon Trails in Escondido, California — a community that integrated wildfire preparedness planning — was able to secure private market insurance because it was intentionally designed and built to meet the IBHS standard. Through a collaboration between KB Home and IBHS, every home in Dixon Trails incorporated ignition-resistant construction features, including Class A fire-rated roofs, non-combustible siding, enclosed eaves, ember-resistant vents, fire-resistant decks and openings and mandatory defensible space, while homes are spaced at least ten feet apart to prevent structure-to-structure fire spread.

The Dixon Trails development also requires ongoing maintenance of these mitigation measures through homeowner’s association rules, ensuring risk reduction is sustained over time. This neighborhood-wide application of science-based standards breaks common ignition pathways that cause urban conflagrations, giving insurers confidence that losses are far less likely to escalate into catastrophic, correlated claims, which allows residents to obtain standard private insurance coverage rather than relying on the California FAIR Plan.

Without proactive mitigation across both the natural and built environments, communities face greater risks of loss of life, widespread property destruction, and prolonged displacement of residents following fires. Over time, these repeated catastrophic losses drive higher recovery costs, strain federal, state, and local disaster programs, and undermine insurance availability and affordability, creating a cycle of escalating risk and economic instability that becomes far more costly to address after fires occur rather than before them.

Read the full testimony here.

Robert Gordon is the senior vice president of the American Property Casualty Insurance Association. 

_{*The opinions expressed in this column are those of the author and do not necessarily reflect the views of EnergyPlatform.News.}