Wildfire
A fire that spreads through forest, scrub or grassland and reaches homes at the edge, a peril long treated as secondary that has become one of the costliest for homeowners insurance in the American West.
Wildfire covers fires that spread through forest, scrub, heath or grassland, and the market follows them mostly when they reach the wildland-urban interface (WUI). November 8, 2018: the Camp Fire started from a Pacific Gas and Electric (PG&E) power line and destroyed the town of Paradise, California, within hours. 85 people died. PG&E filed for Chapter 11 bankruptcy protection in January 2019, facing among other things the claims of subrogated insurers. In California, the inverse condemnation doctrine makes a utility liable for damage caused by its equipment even without proven fault. Homes rarely burn from the flame front. They burn from embers, carried by the wind more than a kilometer, that get in through a vent, a gutter full of needles, a wooden deck; then houses ignite one another. So the underwriter looks at the roof, the openings and the cleared space around the building, which the French forestry code mandates as legal brush-clearing obligations. After the 2017 and 2018 fires, several carriers cut back their writings in California, and State Farm stopped accepting new homeowners applications in the state in May 2023. Business shifts to the FAIR Plan, the insurer of last resort, whose exposure had already grown sharply before the Los Angeles fires of January 2025. In France, wildfire falls outside the CatNat scheme: it comes under the fire cover of the policy. Models simulate ignition, spread by fuel, slope and wind, then damage; the gaps between them remain wide. A practitioner's caveat: several separate fires during the same week of wind raise the hours clause question, and wording drafted for windstorms handles it poorly.
Textbook case, made-up figures: a reinsurer writes a per-event excess of loss treaty for a California homeowners carrier, 100 million dollar retention, with a 168-hour clause. Over six days of dry wind, three separate fires cost 70, 60 and 50 million. Treated as three events, none reaches the retention and the reinsurer pays nothing. If the event definition aggregates fires born of the same weather pattern within 168 hours, the 180 million exceeds the retention by 80 million, which falls on the reinsurer.
wildfire, wildland fire, bushfire, forest fire, wildland-urban interface fire
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