Wildfire is an important component of many ecosystems—one that promotes vegetation and wildlife, and their diversity. Wildfires also prevent the over-accumulation of fuels that can lead to catastrophic burns.

Property owners, however, and particularly those within the wildland urban interface—a region where undeveloped forest, brush and grassland meet urban expansion—have a less favorable view of wildfire. Data reveal an upward trend in property losses over the last two decades—this despite the fact that the frequency of wildfires has been relatively steady. This is a clear indication that, similar to other perils, the increase in insured losses from wildfires is primarily driven by the increase in the number and value of exposed properties in high risk areas.

While wildfires in unpopulated areas are often allowed to burn—and are sometimes even prescribed, fire suppression policies in areas closer to human habitation are aimed at extinguishing fires as quickly as possible. Meanwhile, populations are dispersing, and the number of people living in heavily vegetated areas has increased significantly. The result is a convergence of risk factors: an unprecedented accumulation of fuels in areas of increasing population and property.

Complicating effective wildfire risk management is the unpredictable nature of the peril: atmospheric conditions, topography, and dry vegetation combine to create dangerous conditions. A sudden ignition, whether from natural or man-made sources, can result in a catastrophic wildfire.


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