Insurance Information Institute publishes white paper on wildfire insurance access in underserved California areas

The Insurance Information Institute announced in a press release that it has published a white paper examining wildfire insurance access in underserved regions of California.

According to the Insurance Information Institute (Triple-I), access to affordable wildfire insurance remains a significant challenge in underserved California communities. In its white paper titled "Getting Granular to Find Lower-Risk Properties Amid Wildfire Perils," Triple-I emphasizes the importance of detailed, property-level data in identifying insurable properties within high-risk zones. The study advocates for modernized risk assessment tools to enable insurers to offer coverage more confidently in areas previously deemed too hazardous.

The white paper utilizes Guidewire’s HazardHub Wildfire Score to reassess fire risk in ZIP codes identified as "undermarketed" by the California Department of Insurance: Los Angeles (90210), Mendocino (95490), and El Dorado (95667). The analysis revealed high fire suppression success rates of 90%, 95%, and 97%, respectively, in these areas, challenging previous assumptions of uniformly high risk. By leveraging this level of property-specific data, insurers can more accurately price risk and potentially re-enter markets they had previously exited.

Triple-I’s findings highlight the challenges created by Proposition 103, which restricts the use of forward-looking wildfire models in rate-setting, hampering insurers’ ability to charge actuarially sound premiums. The report supports the California Department of Insurance’s Sustainable Insurance Strategy, which allows insurers to use advanced wildfire models if they agree to write a proportional share of policies in under-marketed areas. According to the white paper, this requirement translates to just 1.275% of a carrier’s total portfolio if the company holds a 10% statewide market share—making targeted expansion feasible.

The Insurance Information Institute (Triple-I), founded in 1960, delivers objective, data-driven research to inform consumers, policymakers, and the insurance industry on key risks and trends. As an affiliate of The Institutes, Triple-I represents nearly 50% of all U.S. property/casualty insurance premiums. Its mission centers on improving public understanding of insurance and supporting a resilient, data-informed insurance marketplace.