A new analysis from the California Department of Insurance and the National Association of Insurance Commissioners shows that rebuilding the communities destroyed by the January 2025 Palisades and Eaton fires to a standard set by the Insurance Institute for Business & Home Safety could reduce projected wildfire losses by one-third on average.
The modeled how community-wide adoption of science-based building and landscaping standards in the Altadena and Palisades area affects average annual loss— a metric insurers rely on when deciding whether to write policies in a given area.
Related: ‘Nation’s First’ Smoke Damage Standards Bill Wending Through California Legislature
The study reflects only the direct benefit of improved building and landscaping at the individual property level, without the amplifying effects on firefighting response or reduced home-to-home ignition, according to the CDI.
The analysis, Rebuilding With Wildfire Safety & Insurability, uses data to show how homes built to more modern, resilient standards have fared better in wildfires. According to the study, 38% of homes in Paradise built after 1997 survived the 2018 Camp Fire.
The IBHS Wildfire Prepared Home (WPH) designation addresses roof protection, building features, and defensible space at two tiers: a base level focused on ember defense and a plus level that adds protection against radiant heat and direct flame contact. The study modeled the insurance impact of rebuilding the Palisades and Eaton fire zones to the IBHS standard that shows rebuilding to the WPH base standard would reduce average annual loss by 31%, and rebuilding to WPH plus would achieve a 35% reduction.
Related: Nine Claims Trends to Watch Through The Rest of 2026
“Every home rebuilt to the Wildfire Prepared Home standard is a home that is safer for the family inside it, safer for its neighbors, and more likely to remain insurable for decades,” said California Insurance Commissioner Ricardo Lara said in a statement. “The data now confirm what the science has long indicated: community-wide resilient rebuilding works, it is achievable, and it is the single most powerful lever available to restore a sustainable insurance market in wildfire country. Los Angeles has the opportunity to lead the way — not just for its own residents, but as a proof of concept for every fire-threatened community in California and across the nation.”
Top photo: 2024 Pacific Palisades Fire. Photo by CalFire.
Topics
Trends
Catastrophe
Natural Disasters
Profit Loss
Wildfire
Louisiana
Was this article valuable?
Here are more articles you may enjoy.
Interested in Catastrophe?
Get automatic alerts for this topic.
