Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

The 2017 historic wildfire losses and ever-changing atmospheric conditions continue to alter the commercial property insurance marketplace in 2021.

Insurance carriers have used the CoreLogic® Wildfire Risk Score to evaluate risk and pricing since 2003 without significant changes to the Risk Score’s calculation. However, 2017’s wildfire season put change in motion.  

According to CoreLogic, 2017’s fire activity increased in scope and occurred in areas that previously had not been considered high risk areas. Analysis of the fires’ impact noted the surprising intensity with which the fire spread and how the fires burned deep into urban residential neighborhoods without the traditional fuel sources one would expect to see. The analysis also determined that both wind and drought played a major role in the fires’ spread and severity.

Since 2017, California has experienced its most destructive fire in its history, the Camp Fire which burned in 2018 and its most destructive fire season on record in 2020. Analysis of the destruction and pre-fire conditions confirmed the relationship between drought and wind with the size and scope of the fires.

In response to the growing data set and changing conditions, CoreLogic now incorporates wind risk data and the drought factor into the 2021 Wildfire Risk Score. While some structures will see no change in risk score, other areas will be negatively impacted. The bottom line is the wildfire risk score will make some structure very difficult and costly to insure properly.

Rancho Mesa clients and brokers will continue to discuss the changing property insurance landscape as more information and underwriter feedback is gathered.

To discuss how to best insure your commercial property, please contact me at (619) 937-0175 or sbrown@ranchomesa.com.