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Wildfire risk models expand to nearly $1.4T of Western property values
Cotality says adding conflagration potential can boost a wildfire risk score by up to 40 points, which can raise coverage risk even without physical changes to a home.
More than 2.5 million properties in the 10 most wildfire-exposed states across the western US now face moderate or greater wildfire risk, totaling nearly $1.4 trillion in estimated reconstruction cost value, according to Cotality’s 2026 Wildfire Risk Report released August 12.
California still has the biggest concentration, with 1.28 million at-risk properties valued at about $850 billion in reconstruction costs. But nearly half of at-risk properties, 49.9%, are outside California, with Colorado and Texas accounting for nearly 560,000 at-risk properties and $252 billion in reconstruction value.
Los Angeles remains the most exposed metro area, with close to 250,000 at-risk properties worth $209 billion. Still, four of the 10 most exposed metro areas nationally are outside California, including Austin, which has more than 100,000 at-risk properties and $49.2 billion in reconstruction value.
Cotality said the report puts particular weight on conflagration, where fire spreads from wildland vegetation into built neighborhoods from structure to structure. It found that incorporating conflagration potential into a standard wildfire risk score can add as many as 40 points, meaning brokers may see score increases driven by new modeling rather than changes to the property itself.
Insurance Business highlighted that disclosure rules can require brokers to understand the updated risk scoring so clients can interpret why their risk scores have risen. The report also pointed to broader exposure beyond California, citing that roughly a third of US homes are inside zones with some wildfire exposure and referencing record fire seasons in other states.