The Insurance Information Institute (Triple-I) has released a new whitepaper addressing the issue of wildfire insurance access in underserved areas of California. The study, titled "Getting Granular to Find Lower-Risk Properties Amid Wildfire Perils," comes as the state faces ongoing challenges with regulatory hurdles related to underwriting and pricing.
Using Guidewire HazardHub's predictive Wildfire Score methodology, Triple-I's research highlights how detailed geospatial data analysis can identify lower-risk properties, even in traditionally high-risk areas. Dale Porfilio, Chief Insurance Officer at Triple-I, noted that "the traditional approach to wildfire risk assessment has left many Californians without access to affordable property insurance coverage."
The report focuses on three ZIP codes identified by the California Department of Insurance (CDI) as being underserved by insurers: Los Angeles (90210), Mendocino (95490), and El Dorado (95667). The analysis reveals strong fire-suppression success rates in these areas, suggesting that many properties are less risky than previously thought.
Leo Tenenblat from Guidewire emphasized the need for insurers to have access to granular property-level data and modern wildfire risk models. He stated that "the Triple-I analysis highlights how next-generation tools and data can uncover lower-risk properties – even in high-risk areas."
Key findings from the study include issues stemming from Proposition 103, which restricts insurers' ability to offer coverage at actuarially sound rates. It also notes that wildfire mitigation efforts can significantly reduce damage risks. The report underscores the importance of incorporating various factors such as vegetation types and drought conditions into risk assessments.
Triple-I's research aligns with CDI's Sustainable Insurance Strategy, which mandates that insurance companies provide homeowners coverage in under-served areas if they wish to use advanced wildfire models in their rate filings.
The conclusion drawn is that addressing California's insurance availability and affordability challenges requires a comprehensive approach focused on reliable data for targeted risk assessment.
Since its founding in 1960, Triple-I has been a key source of information on risk and insurance matters. As an affiliate of The Institutes, it represents a diverse membership covering nearly half of all U.S. property/casualty premiums written.