Over 1.3 million homes in California face wildfire risk.
Report: Rebuilding Homes at Risk of Wildfire Could Cost Over $760 Billion
A recent report released by Irvine-based business intelligence and data analytics firm CoreLogic reveals that it would cost more than $760 billion to rebuild approximately 1.3 million homes at risk of wildfire. The report analyzed various factors such as slope, fuel source, surface composition, drought, and winds to assess the risk to homes.
According to the findings, California, Colorado, and Texas have higher concentrations of at-risk homes with disproportionate reconstruction cost values. California alone has nearly three times the combined amounts of Colorado and Texas. Colorado has over 330,000 at-risk homes, estimated to cost around $141 billion to rebuild, while Texas has 233,000 homes at risk with a reconstruction cost of almost $86 billion.
Communities at High Risk
Communities located near forests, wildlands, and undeveloped areas face an increased risk of fire. Cities in California such as Los Angeles, Riverside, and San Diego are particularly vulnerable. Los Angeles has over 240,000 homes totaling nearly $183 billion in reconstruction costs, while Riverside has approximately 213,000 houses costing almost $112 billion to rebuild. San Diego has about 154,000 residences equating to $95 billion in assets at risk.
Related Stories
Inflation and increasing labor costs have significantly impacted the insurance industry. Since 2018, the costs to rebuild destroyed and damaged homes in California have increased by 33.5 percent, according to CoreLogic estimates. Insurers are facing the challenge of maintaining profitability while providing insurance coverage for wildfire risks.
The report also highlights that spikes in reconstruction expenses are affecting profitability in the insurance industry. Rising labor and material costs have made doing business more expensive. As a result, insurers like State Farm and Allstate have stopped writing new policies in California due to risk exposure and profitability concerns.
Unfortunately, the loss of insurance availability leaves many homeowners with limited options. They are forced to rely on the FAIR plan, a last-resort insurance opportunity mandated by the state, which is significantly more expensive and offers less coverage.
Homeowners caught in this “perfect storm” of wildfire danger and limited insurance availability are facing difficulties in selling their properties. Most mortgages require full fire coverage, making it challenging for potential buyers to secure homeowners insurance and lenders to approve sales in fire-prone areas.
Efforts are underway to address the insurance crisis, with insurance companies and legislators exploring options for more coverage opportunities. CoreLogic has developed a tool that utilizes artificial intelligence to evaluate properties and issue comprehensive wildfire risk scores, benefiting insurers and property owners.
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases
Now loading...