CoreLogic released its annual Wildfire Risk Report, which quantifies the magnitude of wildfire risk across 14 western United States in terms of the number of residential properties and their associated total reconstruction cost value.
IRVINE, Calif., Aug. 10, 2023 /PRNewswire-PRWeb/ -- CoreLogic®, a leader in global property information, analytics and data-enabled solutions, released its annual Wildfire Risk Report, which quantifies the magnitude of wildfire risk across 14 western United States in terms of the number of residential properties and their associated total reconstruction cost value.
In California, more than 1.2 million homes with a combined reconstruction cost value of more than $760 billion are at moderate or high risk of wildfire damage. In Colorado, more than 300K homes with a total reconstruction cost value of $140 billion are at risk, followed by 200K homes in Texas with a total reconstruction cost value of $85 billion. The Los Angeles, Denver and Austin metro areas lead the top three states in terms of the number of residential properties with elevated wildfire risk.
Increasing exposure in wildfire-prone areas like the Wildland Urban Interface (WUI) continues to be a major driver of risk in the U.S. Shifting climate patterns and extreme weather events including the return of the El Niño phase of the El Niño Southern Oscillation (ENSO) and the atmospheric rivers in California last winter, could exacerbate risk and lengthen the wildfire season in the western U.S. According to the National Oceanic and Atmospheric Administration (NOAA) National Center for Environmental Information (NECI), the number of acres burned each year has steadily increased since 1983. The average number of acres burned between 2010 - 2022 is 93% higher than that from 1990 - 2000. Increased wildfire activity combined with a greater number of homes built in or near the WUI equates to a greater level of risk in the U.S.
In addition, P&C insurers in the U.S. must deal with the increasing cost of reconstruction materials and labor which has inflated the overall cost of wildfires. In the past five years, CoreLogic estimates that reconstruction costs in California have increased by 33.5%.
Using data science resources and incorporating machine learning and artificial intelligence technology, CoreLogic has identified where homes are at the highest level of wildfire risk and has demonstrated how these analytics can contribute to more informative wildfire risk models. Ultimately, this creates a more accurate assessment of potential risk, than relying on historical precedence, given shifting nature of global climate and weather patterns.
Wildfire risk is not static and it is imperative to understand that a changing climate could alter the risk landscape in the future. Leveraging CoreLogic's Climate Risk Analytics, it is possible to assess the potential increased wildfire costs in the U.S. by decade and climate scenarios (i.e., representative concentration pathway, or RCP, from the Intergovernmental Panel on Climate Change (IPCC)). The CoreLogic analysis revealed that California residential average annual loss (AAL) may increase by 31% and 41% by mid-century (i.e., 2050) under a moderate (RCP 4.5) and extreme (RCP 8.5) increase in greenhouse gas and aerosol emissions, respectively. This analysis assumed no exposure growth and only accounts for increased wildfire activity due to climate change.
For homes to remain insurable, wildfire risk assessment tools must be built on comprehensive wildfire science and account for property- and community-level mitigation, including home hardening and retrofitting older buildings that reduce wildfire damage at the property level. This includes factors such as increased defensible spaces and effective ember protection—which can significantly reduce structural losses and make insurance coverage more affordable.
To read the full report, including best practices for wildfire risk assessment, visit h https://corelogic.com/wildfirereport
About CoreLogic
CoreLogic is a leading provider of property insights and innovative solutions, working to transform the property industry by putting people first. Using its network, scale, connectivity and technology, CoreLogic delivers faster, smarter, more human-centered experiences, that build better relationships, strengthen businesses, and ultimately create a more resilient society. For more information, please visit http://www.corelogic.com.
Media Contact
Robin Wachner, CoreLogic, 8004261466, [email protected]
SOURCE CoreLogic
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