This post is part of a series sponsored by Cotality.
There is a blurred line between where the wildfire ends and the fire begins. However, a comprehensive risk management strategy associated with wildfires cannot be developed without understanding the two types of fires, their dynamics and unique risks.
Wildfires are uncontrollable fires that usually start in the wild and are largely fueled by natural vegetation. On the other hand, when wildfires spread to the built environment and become structure-to-structure fires, a large fire occurs. With the shaping materials of the shaping flames, the fires intensify and accelerate faster than traditional wildfires.
Once a wildfire turns into a fire, the flames can burn the community in just a few hours or less.
The fire is on the rise, which is why Cotality launched the Wildfire Fire model, which is the first solution to analyze the risk of fires in each structure.
Although traditional wildfire models focus only on danger, Cotality’s new model is dedicated to assessing the risk of fires in built environments.
Use fire-specific risk assessment tools along with traditional wildfire risk assessment solutions such as the Cotality Wildfire Risk Score (WFRS), while enabling insurers to create more comprehensive risk management strategies. Only by looking at the mechanisms that are viewed from all perspectives with wildfire-related risks, insurers can provide more coverage in higher risk areas without gambling about their solvency.
Wildfires and fires: The important difference
Historically, disaster risk management professionals categorized wildfires as “secondary hazards” and believed they did not guarantee the level of model review with traditional “main hazards” such as hurricanes and earthquakes. But in the decade associated with wildfires, disaster communities now classify wildfires as “an emerging secondary danger” and enter the “main” rating of hurricanes and earthquakes.
Over the past decade, wildfires have grown intensified, prompting many property insurance providers to change their appetite for risk. They are withdrawing from areas that are prone to occur, suspending renewals of certain policies and significantly increasing premiums.
The surge in wildfire damage is not due to huge changes in weather patterns or only flammable natural vegetation. Instead, this is because wildfires are increasingly becoming wildfire-induced fires, including the Maui fire in 2023 and the Los Angeles fire in 2025.
Once considered a total urban threat, fires are now more frequent in suburban and even rural areas. Driven this phenomenon is the rapid expansion of the wilderness-city interface (WUI), where human development meets the natural wilderness. In the age of remote work and property value, these areas have developed rapidly as WUI land is often more affordable, especially in California, while also providing scenic views and proximity to nature. Literally, many new homeowners in these areas have inadvertently added fuel to potential fires.
According to Cotality™ data, 10 wildfires have occurred since 2020, causing 26,000 buildings in Los Angeles wildfires and $3.5 to $45 billion in insurance losses. As these events occur at least every other year, insurers need to measure the rising risks that a fire can bring to their portfolios.
The dual approach to natural danger
With the fire of the mixture, wildfires present complex multidimensional dangers. Although unlike the dangers of “all nature”, they are not insurable. With the right risk strategies and digital tools, insurers can make more data-enabled risk decisions that enable them to operate in an ever-expanding WUI.
Cotality provides a dual view of non-housing fire risk through two highly granular deterministic risk models. These two different perspectives help insurers see blind spots from the past, providing a comprehensive assessment of non-home fire risks for any property.
The Cotality Wildfire Fire Model returns a score of 1-100 and insurers can use it with a 1-100 Wildfire risk score to get a comprehensive view of the fire risk on any property. Each score reflects different factors that lead to the risk of fire and wildfire, respectively, providing direct, feasible tools for underwriters and risk managers.
Wildfire Risk Score (WFRS) takes into account the following contents of any property:
- risk
- Distance to higher hazardous areas
- Distance from the wasteland
- wind
- drought
This score is zero in natural wildfire hazard and has potential impact on the property forward The built environment is in a way.
Then, the wildfire rating considers the following:
- Structural features such as roof and siding composition, combustible accessories and window materials
- Building density
- wind direction
- Weather and climate characteristics
- Ember ingredients and all nearby vegetation types
Why are both scores necessary
Using two scores on each attribute is critical, as features with one fire risk type may not face another. Property with very low wildfire risks – far enough from the WUI to attract traditional attention – may be at extremely high risk of fire. Cotality’s recent analysis identified fires with low risk of fires but high risk of fires in Palisades and Eaton.
When insurers exploit these two scores in decision making around qualification, underwriting and even pricing determination, they will have a comprehensive view of risk at the property level.
Wildfire Considered Core Fire
The ability of insurers to provide broad, affordable coverage to people across the United States, even in high-risk areas, is critical to the long-term survival of the insurance system and home ownership.
Cotality’s new wildfire risk score (now in California and other western states) is soon a key addition to any modern wildfire risk strategy. The toolset on the market answers two key questions: How will the fire begin? And, how far will it go?
It is time to make the fire part of the wildfire dialogue and give it the special analysis it needs.
To learn more about the Cotality Wildfire Kit, please contact us today.
©2025 Cotality. all rights reserved. While all of the content and information is believed to be accurate, the content and information is provided “as is” with no guarantee, representation, or warranty, express or implied, of any kind including but not limited to as to the merchantability, non-infringement of intellectual property rights, completeness, accuracy, application, or fitness, in connection with the content or information or the products referenced and assumes no responsibility or liability whatsoever for the content or information or the products referenced or any reliance is there. Cotality™, Cotality Logo and Intelligence Buder Bounce™ are CoreLogic, Inc. Trademark of D/B/A Cotality or its affiliates or subsidiaries.
theme
Disasters, natural disasters, wildfires
