Climate change and federal policies are making wildfires more frequent and intense. Migration patterns are increasing the exposure of assets to wildfire threats. And assets that are more vulnerable to wildfires translate into higher costs.
Part II of our Wildfires Briefing explores four categories of opportunity for the private sector: 1) Implementing modern building materials and codes; 2) Technologies for better fire management; 3) New insurance models; and 4) Private financing for forest management.
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- Feature: It’s wildfire season. We’ve updated our two-part wildfire briefing with the latest data and statistics. New numbers and examples, but the same underlying conditions that make wildfires so expensive. - In the news: Could the U.S. government be a federal reinsurer? - From the archive: How incremental actions in the commercial real estate space can add up to resilience.
The United States is heading into the 2026 wildfire season after one of the most expensive years on record. The 2025 Los Angeles fires alone produced $40 billion in insured losses, the largest wildfire insurance loss the industry has ever recorded.
But early data in the first few months of 2026 suggest the bill is about to grow. By May 1st, 1.8 million acres had already burned across the U.S., the highest year-to-date total since 2017. Florida and Georgia are in extreme drought. Colorado just closed its worst snowpack year on record at 22% of the 30-year median. With fire seasons now roughly two months longer than they were in the 1970s, 2026 could reset the ceiling on wildfire losses again.
Since 1980, wildfires have claimed a growing share of the billion-dollar disaster ledger.
Intense wildfires are twice as common as they were in the 2000s.
In the American West, the annual area burned by “high-severity” fires has increased roughly eightfold since 1985.
In California, 45 megafires were recorded throughout the 20th century. In the first 20 years of this century, there had already been 35.
The cost drivers haven't changed from the framework we've laid out in prior versions of our Wildfire Hazard Briefings (which were first released in 2024). Three drivers continue to push wildfire from a periodic catastrophe into a structural cost driver. What has changed is the data underneath each one—and the maturity of the private-sector responses. As we enter wildfire season in 2026, we’ve updated the Wildfire Hazard Briefing Part I and Wildfire Hazard Briefing Part II with current statistics, new research, and examples of private sector innovations.
Driver #1: Climate change and land management policy are making wildfires more frequent and intense.
A warming climate has produced hotter, drier conditions and prolonged droughts, leading to earlier snowmelt, longer fire seasons, and drier accumulated vegetation. Meanwhile, fire suppression policies have made wildfires more severe by preemptively suppressing small fires that help reduce brush accumulation.
Driver #2: Population growth in fire-prone areas has placed more assets in harm's way.
The Wildland Urban Interface (WUI), where human development meets flammable wildland, is the fastest-growing land use type in the contiguous United States. From 1990 to 2020, the number of homes in the WUI grew by 47%, and it now encompasses nearly a third of all U.S. homes. Unaffordable housing in urban centers has driven much of that growth, pushing middle- and lower-income households into fire-prone areas where prices are lower and risk is higher.
More people in the WUI translates directly into higher costs. The Forest Service spent nearly four times as much fighting fires in 2020 as in 1989 (adjusted for inflation), and those costs could rise as much as 84% by 2050.
Driver #3: The physical assets in harm's way are not built to withstand wildfire.
Out-of-date zoning, lapsed building codes, and underinsurance compound the exposure problem. Many municipalities have not adopted fire-resistant building standards, and even where codes exist, enforcement is uneven. One in seven U.S. homes is uninsured.
Since 2020, California's insurer of last resort, the FAIR Plan, has more than doubled in size. When households lack adequate insurance, the costs of recovery fall on individuals, local governments, and federal disaster programs.
The disparity cuts along economic lines. A 2020 study found that wildfire spread is 6% less likely to occur when average property values increase from $200,000 to $400,000, in part because wealthier communities can afford the landscaping, home hardening, and maintenance that create defensible space. Rural, lower-income, and immigrant communities often cannot.
Opportunities to Reduce the Impacts of Wildfires
The growth in wildfires has been met with a fast-growing ecosystem of solutions, innovations, and coordinated efforts to keep people and property out of harm’s way.
No single measure will reverse these trends. More people and assets in fire-prone areas, combined with hotter and drier conditions, mean baseline costs will remain elevated. But there are meaningful levers for the private sector to reduce damage and interrupt the cycle of loss.
Implementing modern building materials and land use policies. Check out the Dixon Trail development in California, the nation’s first wildfire-resilient neighborhood.
Incorporating new technologies for better decision-making, risk identification, and fire management.
Adopting new insurance models, like parametric wildfire insurance.
Directing private capital toward forest management.
The US Government as a Federal Reinsurer? These Researchers Think It’s Possible | Green Central Banking | A proposed “Re US” program would make the federal government a backstop reinsurer for the most extreme climate risks, using its lower cost of borrowing capital to stabilize insurance markets. The idea reflects growing interest in public-private risk sharing, but critics say that the idea leaves out investment in adaptation, resilience, and risk reduction.
How the Coffee Industry is Making the Case for Climate Insurance | World Economic Forum | The coffee industry is at risk from climate variability. This piece argues that parametric climate insurance backed by public-private partnerships could de-risk the entire coffee value chain. The approach points toward a broader move towards solutions that combine risk mitigation, management, and transfer to stabilize industries and global supply chains.
New York Plans $95M Flood Protection Project in Homecrest | Smart Cities World | New York City’s $95 million Cloudburst project turns streets, schoolyards, and parking lots into distributed green infrastructure, designed to absorb intense rainfall before sewers overflow. The initiative targets flooding hotspots to manage stormwater at the neighborhood scale.
FEMA Council Backs Overhaul of Disaster Response | Insurance Journal | A White House review panel has proposed reshaping FEMA to deliver aid faster while narrowing the agency’s role, shifting more disaster responsibility and financial risk to states.
Read more about resilient public infrastructure and government solutions on The Epicenter here.
Real Estate & Construction
Climate Risks Drive Commercial Real Estate Insurance Costs Higher | Barron’s | Climate risk is reshaping commercial real estate economics. A new analysis from First Street finds premiums rising for apartments, retail centers, and industrial properties as insurers price in growing exposure to extreme weather. The trend signals financial pressure on property owners and a potential ripple effect for rents, investment decisions, and urban resilience planning.
How Climate Risk Is Driving Booms & Busts in Markets Across The United States | Quartz | According to Quartz, housing markets are beginning to sort themselves along climate and affordability lines. The metros poised to grow are often inland, lower-cost cities, while several pandemic boomtowns and coastal markets face cooling demand tied to rising insurance costs and climate risk.
Read more about resilient real estate on The Epicenter here.
Private Investment
The "Anti-Lightning" Wildfire AI Tech Firm Skyward Gets $1M in Funding From British Columbia | Hotshot Wake Up | Skyward Wildfire Technologies has secured $1 million from British Columbia to trial an AI-assisted “anti-lightning” wildfire system aimed at reducing lightning-caused ignitions. The controversial approach revives long-debated weather modification ideas amid rising wildfire risk.
AI Can’t Beat Old-School Weather Models When Heat and Cold Turn Deadly | Science Advances | In ClimateProof’s latest roundup of adaptation news and tech, a study finds that AI weather forecasting lags physics-based models when predicting extreme heat, cold, and wind events. The study shows AI currently underestimates record-breaking extremes. (Hat tip, ClimateProof, for this one.)
Read more about private investment on The Epicenter here.
How Incremental CRE Actions Add Up to Resilience | Abby Ross | Incrementalism is often dismissed as not scalable enough to translate into population-level outcomes. But a series of incremental changes, conducted by various stakeholders in concert, can translate into new norms, higher standards, and more resilient cities.
The Adaptation Economy Thesis | Abby Ross | Four convictions drive an evolving investment thesis in the adaptation economy: 1) The adaptation economy is large and growing; 2) Resilience makes for more durable investments; 3) Investors see predictable growth and opportunity in the adaptation economy; 4) It’s still early and underserved.
The Evolution of Home Rebuilding Catalogs: Lessons from Katrina, Santa Rosa, and Lahaina | Alexis M. Pelosi and Robin Keegan | The lack of standard home rebuilding playbooks, combined with the uneven delivery of federal disaster recovery funding, has led to fragmented rebuilding efforts over the past few decades. However, disaster recovery has evolved to more systematic approaches using pre-approved home plan catalogs.
The Statistic of the Week
50%
Most states are at least 50% short of their average topsoil moisture for this time of year. These dry conditions can exacerbate fire.
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The Epicenter helps decision makers understand climate risks and discover viable resilience solutions. The Epicenter is an affiliated publication of The Resiliency Company, a 501(c)3 nonprofit dedicated to inspiring and empowering humanity to adapt to the accelerating challenges of the next 100+ years.
Climate change and federal policies are making wildfires more frequent and intense. Migration patterns are increasing the exposure of assets to wildfire threats. And assets that are more vulnerable to wildfires translate into higher costs.
Part II of our Wildfires Briefing explores four categories of opportunity for the private sector: 1) Implementing modern building materials and codes; 2) Technologies for better fire management; 3) New insurance models; and 4) Private financing for forest management.
Treating wood as a public utility, rather than a waste product, could reduce fire risk, support insurer re-entry, and unlock economic value that currently goes up in smoke.
Treating wood as a public utility, rather than a waste product, could reduce fire risk, support insurer re-entry, and unlock economic value that currently goes up in smoke.
