The Weekly: Wildfire and the WUI—Why Disaster Costs Keep Rising

With wildfires blazing across the West, due in large part to a series of lightning strikes across California, The Epicenter is revisiting our previous stories about the drivers that are contributing to higher costs and more devastating impacts from wildfire, and the opportunities that exist to mitigate those impacts.

The impact of a wildfire is far-reaching. In addition to loss of life and loss of property, wildfires also cause smoke-related health risks, greater risks of future disasters like flooding, contaminated water supplies, and even changes to the atmosphere’s hydrological cycle by altering snow retention and runoff. 

A collection of drivers is exacerbating the impacts of wildfires on communities, including migration patterns that have resulted in greater exposure due to where people have chosen to live, assets that are more vulnerable due to out-of-date land use decisions and building codes, and increased frequency and intensity of fires due to both federal policies and a changing climate. However, innovative solutions are emerging to mitigate these impacts. 

Migration Patterns Are Increasing the Exposure of Assets to Wildfire Threats

Population migration is exposing more assets to wildfire risk. The Wildland Urban Interface (WUI) is the land area where structures and human development intermingle with undeveloped wildland or vegetative fuels, presenting greater wildfire risk. And yet, in spite of this risk, the WUI is the fastest-growing land use type in the contiguous U.S. Meanwhile, it’s increasingly middle- and lower-income residents who have been driven into the WUI, due to unaffordable housing in urban centers. These population shifts have translated into more expensive fires—both in terms of the cost of fighting them and the cost of property damage. 

Solutions Are Emerging to Incentivize Reduced Exposure Through Smarter Land Use

A May 2025 report from Resources for the Future, Shaping Land Use Patterns in the Wildland-Urban Interface: The Role of State and Local Governments in Reducing Exposure to Wildfire Risks, highlights incentives “that states and the federal government may be able to use to direct growth toward lower risk areas.” The report calls out two compelling solutions to incentivize reduced development in the WUI: 1) wildfire hazard mapping and 2) density transfer programs that incentivize shifting development out of higher risk areas. 

California’s Department of Forestry and Fire Protection (CAL FIRE) has been a leader in wildfire hazard mapping with their designation of “Fire Hazard Severity Zones,” or FHSZs. No explicit state regulations apply within FHSZs, but the designation may help shape land use decisions by better informing homebuyers as they make purchasing decisions, potentially curbing demand for homes in these high-hazard areas. In 2022 and 2023, Oregon and Colorado passed similar wildfire mapping legislation. 

Meanwhile, Resources for the Future highlights density transfer programs as another potential solution. Density transfer programs incentivize shifting allowable development from high-risk areas into lower-risk areas, with funding from private developers rather than requiring government money.

Assets That Are More Vulnerable to Wildfires Translate Into Higher Costs

Not only are more physical assets exposed, but those assets are also more vulnerable to wildfire damage and associated costs, due to out-of-date land and community-planning practices. Zoning, local ordinances, and building codes can reduce wildfire damage, but many municipalities are missing up-to-date fire policies and codes, such as requiring fire-resistant building materials or defensible, brush-free perimeters around homes. Meanwhile, private insurers are rapidly changing where and how they insure properties, leaving many homeowners more financially vulnerable. 

Solutions to make assets less vulnerable include updated building materials, zoning codes, and land use policies; innovative technologies; and new insurance models

Building at and above code, with the latest building materials and land use policies, can protect new developments from the damage wrought by wildfire. A 2021 analysis from the California Building Industry Association found that only 1% of homes built after 2010 suffered damage in nine of the most destructive fires since 2017. The reason: new building codes were enacted after 2007 that required “hardening” protections, as well as land-use policies like keeping flammable vegetation away from homes. At the household-level, hardening includes fire-resistant materials on siding, roofs, decks and fences, along with mesh-covered vents that prevent embers from entering a structure. Meanwhile, at the neighborhood-level, improvements can include open spaces that serve as fire breaks, and prudent management of vegetation and public infrastructure.

Many companies are emerging to help enable these household and community-level upgrades, including Wuuii (whose app lets property owners scan their home or business, generates a prioritized list of treatments based on their insurer's requirements, and connects customers to local contractors to complete the work) and Fire Aside (that offers a suite of products to fire departments and other public safety agencies to digitize inspections of homes and businesses for compliance with defensible space and home hardening requirements).  

A suite of emerging tools is also enabling better vegetation management and intelligence, offering more precise decision-making and risk insights to stop or prevent fires. For example, Overstory, AI-Dash, and Pano offer technology for vegetation management and intelligence, while Burnbot leverages drones and unmanned robots to facilitate prescribed burns at scale. Similarly, ALERTCalifornia uses a network of over 1,000 cameras to alert firefighters about potential fires. Meanwhile, WatchDuty has emerged as a leader in the wildfire tech space, alerting users of nearby wildfires and firefighting efforts in real-time. These solutions are indicative of a wave of new research and more early-stage venture funding going into fire-tech. Venture capital firms like Convective Capital are investing in startups fighting wildfires and, with events like their Red Sky Summit, growing the ecosystem that’s developing and scaling innovative, tech-based solutions to our wildfire crisis. 

As heightened wildfire risk strains the insurance and reinsurance markets, new insurance models are emerging to offer fresh solutions. Residents in the Wildland Urban Interface (WUI) across the country are losing insurance, and insurance companies are withdrawing from states like California where they’re over-exposed. However, insurance innovators like Kettle, Delos, and Stand are emerging with new products to fill the gap. Meanwhile, new models like the Resilient LA Delta Fund are offering innovative solutions to preserve insurability with post-wildfire resilient home rebuilds.

Climate Change and Federal Policies Are Making Wildfires More Frequent and Intense

Intense wildfires are now twice as common as they were in the 2000s, and the number of megafires—fires that burn more than 100,000 acres—has ballooned in recent decades. A warming climate has produced hotter and drier conditions and periods of prolonged drought. These conditions lead to earlier snowmelt, longer fire seasons, and the accumulation of drier vegetation, which increases the likelihood of larger, hotter, and more intense fires. Meanwhile, policy decisions exacerbate wildfire intensity. Historical fire suppression strategies have made wildfires more severe by too quickly stopping small fires that are beneficial for reducing brush accumulation that otherwise fuels more severe fires later. 

Solutions That Could Reduce the Intensity of Wildfires Include Improved Forest Management

As research and awareness of the deficits of legacy fire suppression strategies have grown in recent years, approaches to fire management have changed, and we are now seeing a shift toward resiliency instead of avoidance. There are lessons from indigenous fire management practices that work with fire; harnessing its power and recognizing that the very act of attempting to eliminate wildfires increases the risks of catastrophic ones.

The Lomakatsi Restoration Project, for example, provides a variety of programs in collaboration with tribes and tribal communities to advance ecological restoration initiatives that embrace cultural fire to build more resilient ecosystems and communities; and Fire Networks has developed a consortium of peer networks focused on changing our relationship to fire, including the Indigenous Peoples Burning Network. Meanwhile, a project in the Tahoe National Forest from 2018-2022 rolled out restoration treatments to 14,545 acres through a $4 million Forest Resilience Bond (FRB) issued by Blue Forest Conservation. 

It’s clear that wildfire is becoming an ever more pervasive threat, but innovative solutions are emerging that can help adapt our built environment and communities for fire.

The Epicenter Posts You Might Have Missed:

• Partnerships Mark Early Phases of Los Angeles Recovery | Contributing Writer, Francis Bouchard | At the Milken Global Conference in May 2025, rebuilding LA was top of mind. Partnership, system-level engagement, and local leadership were key themes. And the insurance sector has a critical opportunity to reframe its role in disaster preparedness and society at large.
• What is Resilient Critical Infrastructure? | The Epicenter Editors | The Epicenter defines infrastructure as the physical, economic, and social systems central to the functioning of an economy and a society. Resiliency in critical infrastructure is about the ability to withstand extreme climate impacts and recover from them quickly.
• Resiliency Spotlight: Nanotech’s Cool Roof and Fire Mitigation Technology | An interview with Carrie Horazeck and Troy Marshall | If $1 invested in disaster prep saves $13, then it's clear that investing in preparedness produces a higher ROI than recovery. But what does that preparation look like? An interview with Nanotech Materials offers an example of resiliency in the category of fortified roofing and building materials.

What We’re Reading From the Resiliency Ecosystem:

• Insurability: 20 Years Later, Hurricane Katrina’s Impact Echoes in Models, Mitigation and Reforms | Insurance Journal | This piece explores how, two decades after Hurricane Katrina, the U.S. property insurance industry has strengthened its resilience through clearer policy language, advanced hurricane-loss modeling, updated building codes, stronger mitigation efforts, and litigation defenses. It highlights how insurers have sharpened their risk assessment capabilities to become better prepared for future catastrophic events. (Read more about insurability on The Epicenter here) 
• Public Infrastructure: Judge dismisses cities’ lawsuit over termination of climate justice grants | Smart Cities Dive | This piece explores how a coalition of local governments, tribes, and nonprofits challenged the Trump administration’s abrupt termination of the EPA’s Environmental and Climate Justice grant programs to fund critical public infrastructure initiatives like air quality monitoring, resilience projects, and lead pipe replacement. The lawsuit was dismissed by a U.S. District Judge on August 29, leaving roughly $3 billion in community-based funding in limbo. (Read more about resilient public infrastructure and government solutions on The Epicenter here) 
• Real Estate: More Than $12T in U.S. Homes Face Severe Climate Risks | Realtor.com | This piece explores how over one in four U.S. homes—representing $12.7 trillion in real estate value—are now exposed to severe climate hazards, such as flooding, hurricane-force winds, and wildfires. It underscores how these escalating hazards are reshaping housing markets by driving up insurance costs and complicating coverage. (Read more about resilient real estate on The Epicenter here)

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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.