Cotality Report: 2.5M U.S. Properties Face $1.4TN Wildfire Risk as Conflagration Blind Spots Emerge

Quick Summary

Cotality's 2026 Wildfire Risk Report identifies 2.5 million U.S. properties at risk, totaling $1.4 trillion in exposure. By analyzing wildfire risk through conflagration modeling, Cotality helps insurers identify hidden vulnerabilities where fire spreads home-to-home, enabling more accurate underwriting and targeted property-level mitigation strategies for homeowners.

How Does Cotality Address Hidden Wildfire Risk?

Cotality solves the problem of underestimated wildfire exposure by introducing conflagration modeling, which tracks how fire moves from wildlands into residential neighborhoods. Traditional models often overlook home-to-home fire spread, leaving insurers with a critical blind spot in suburban areas. By layering conflagration potential onto standard scores, Cotality can increase a property's risk rating by up to 40 points, revealing hazards in areas previously deemed safe.

• 1.28 million properties at risk in California alone.
• $850 billion RCV exposed in the California market.
• 49.9% of at-risk properties located outside of California.

What Results Has Property-Level Mitigation Delivered?

Cotality provides granular risk data that rewards resilience. Their property-level mitigation score evaluates structure density, building materials, and wind patterns to provide a holistic risk view. Data shows that homes in the top 10% for mitigation have expected losses 78% below average, whereas the least-prepared homes face losses 10 times the average. This allows carriers to expand underwriting footprints safely while encouraging homeowners to invest in specific resilience measures.

"New property-level data now empowers insurers to identify what additional steps homeowners can take to mitigate the risk on their properties and leverage that additional resilience in their decision making. Expanding the assessment means going beyond terrain and vegetation to look at factors like structure density, building materials, wind patterns and ember exposure," said Jamie Knippen, Cotality’s director of hazard insights.

How is Wildfire Exposure Shifting Geographically?

The report highlights that wildfire risk is no longer just a California issue. States like Texas and Colorado now represent 560,000 at-risk properties with a combined $252 billion in reconstruction cost value. Metros such as Austin and Denver are seeing significant exposure increases, requiring insurers to move away from "broad-brush" assessments. By accounting for the "fire next door," carriers can ensure properties are properly insured for modern catastrophic realities.

FF NEWS TAKE:

This report moves the needle by shifting the wildfire risk conversation from "forest fires" to "neighborhood conflagrations." For the insurtech sector, Cotality’s ability to add 40 points to legacy risk scores is a wake-up call. Precise property-level data is no longer a luxury; it is a requirement for solvency in the Western U.S. as climate-driven risks become increasingly localized and volatile.