The Center for Insurance Policy Research (CIPR) releases a new white paper called the Application of Wildfire Mitigation to Insured Property Exposure coauthored by CIPR, RMS, and the Insurance Institute for Building and Home Safety (IBHS). The white paper explores the economic benefits of wildfire resilience strategies in nine communities in California, Colorado and Oregon. Analysis was conducted using the RMS North America Wildfire Models, which calculate risk by looking at a range of factors such as topography, distance to vegetation, slope, and other location-specific information including roof system covering, roof vents, suppression, and accessibility conditions.
Key findings include:
Historical wildfire claims data is not sufficient to promote risk reduction. Catastrophe models are a critically important tool for calculating the cost/benefit for wildfire risk reduction actions.
Wildfire risk can be managed. Implementation of structural and vegetation modifications can reduce the risk from wildfires by up to 78 percent. The losses avoided can be even more significant (e.g., five times higher) when comparing a highly flammable structure to a well-built one.
Twenty years of building science research from organizations like IBHS, National Institute of Standards and Technology (NIST), and others demonstrate that insurance companies could adopt risk reduction strategies instead of withdrawal strategies.
Read the full white paper here.