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Graphic describing white paper on Application of Wildfire Mitigation to Insured Property Exposure and logos of CIPR, RMS and IBHS

Dec. 7, 2020

New White Paper from CIPR Reveals Key Actions to Reduce Wildfire Risk

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

About the National Association of Insurance Commissioners

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally.