California homeowners are asking a question that feels both urgent and unfair: why has one home become nearly uninsurable while a neighbor’s policy remains affordable? As insurance expert Karl Susman explained during a recent Insurance Hour listener Q&A, the answer usually lies in how wildfire risk is mapped, scored, and interpreted by insurers.
From private fire models to accessibility issues and differences in how “zones” are defined, wildfire risk assessment in California is far more complex—and inconsistent—than most people realize. These discrepancies help explain why premiums can triple within the same neighborhood.
This article breaks down the key questions Susman addressed, how insurers determine risk, what fire maps actually mean, and why two nearby homes can face dramatically different insurance outcomes.
How Insurers Determine Wildfire Risk by Neighborhood
A listener asked how wildfire risk is calculated in mixed communities with single-family homes, townhomes, apartments, and shared spaces. Susman explained that insurers rely on dozens of highly specific data points, not just ZIP codes.
Key factors include:
- Location and topography, including proximity to brush, canyons, and forested land
- Distance to fire hydrants and staffed fire stations
- Emergency vehicle access, including road width and turnaround space
- Local infrastructure such as slope, road conditions, and escape routes
- Historical fire activity and surrounding vegetation
Insurers also look closely at whether a fire truck can physically reach and maneuver at the property. Even two homes in the same development can receive very different risk scores based on micro-geography and access limitations.
Why Nearby Homes Can Have Vastly Different Premiums
One listener reported a premium increase from $6,000 to $12,000 in two years in Carmel Valley, while friends in Sonoma—near areas that previously burned—paid nearly one-third as much. Susman explained that this discrepancy comes from how fire maps are created and applied.
There is no single fire map used by all insurers. Instead:
- Each carrier builds its own proprietary wildfire risk model
- Data is weighted differently by each company
- One insurer may focus on vegetation and slope, while another emphasizes wind patterns, fire history, or firefighting resources
As a result, the same home can be considered moderate risk by one insurer and extreme risk by another. These internal models are not required to mirror CAL FIRE maps, which adds another layer of inconsistency.
Who Creates Fire Maps in California
California wildfire risk maps are created at multiple levels:
- CAL FIRE Fire Hazard Severity Zone Maps classify areas as Moderate, High, or Very High and are primarily used for building codes and mitigation planning.
- Private insurer fire models are proprietary systems developed by companies like State Farm, Farmers, and Allstate using satellite data, climate trends, and loss experience.
- Third-party catastrophe model providers such as Verisk, CoreLogic, and RMS supply modeling data to insurers and reinsurers.
Because insurers are not required to rely on CAL FIRE maps for pricing decisions, discrepancies between public maps and private underwriting models are common—and deeply frustrating for homeowners.
The Role of Catastrophe Models in Modern Risk Scoring
Most modern wildfire risk maps are built on catastrophe (“CAT”) modeling. These advanced simulations analyze:
- Historical wildfire losses
- Climate and weather patterns
- Wind behavior
- Fuel loads and vegetation density
- Building materials and defensible space
CAT models are powerful forecasting tools, but they are not perfect. Critics argue they can overgeneralize and unfairly classify properties as high risk simply due to proximity to burned areas. Susman, however, supports their use when applied transparently and responsibly.
“All the data, all the science, just the facts—fair and non-discriminatory,” he has said. “It’s not about raising rates; it’s about making the system sustainable.”
Can Homeowners Challenge a Fire Risk Rating?
Homeowners generally cannot challenge an insurer’s proprietary fire model directly, but there are practical steps that can make a difference:
- Request an explanation of the main factors driving your risk score
- Shop multiple insurers, since each uses different models
- Document all mitigation work with photos and receipts
- Request a mitigation review or property inspection
- Install and maintain defensible space, fire-resistant roofing, and ember-resistant vents
“If you can show you’ve hardened your home,” Susman explained, “you might be able to get reclassified.”
Understanding DIC Policies and Fire-Excluded Coverage
One listener raised concerns about a “regular homeowners policy with a fire exclusion” offered by a State Farm agent instead of a formal Difference in Conditions (DIC) policy.
In high-risk areas, homeowners often combine:
- A
California FAIR Plan policy for fire and smoke damage
- A
DIC or wraparound policy for theft, water damage, and liability
Together, these replicate traditional homeowners coverage. Susman cautioned that terminology matters.
“If it’s not officially called a DIC policy, I’d be curious what product that really is,” he said. Homeowners should always verify exactly what risks are excluded and how policies coordinate before purchasing.
Why “Fire Zone Inflation” Happens
Many Californians experience steep, repeated premium increases without filing any claims. One caller saw premiums rise from $6,000 to $9,000 to $12,000 in just two years.
This happens because insurers constantly recalculate risk using:
- Updated satellite imagery
- Changes in vegetation and development
- Nearby wildfire losses
Even when a home is untouched by fire, surrounding activity can trigger large adjustments. Statistically, nearby losses increase projected future risk, which feeds directly into premiums.
How California Regulators Are Responding
Insurance Commissioner Ricardo Lara is pushing reforms through the Sustainable Insurance Strategy to make wildfire risk assessment fairer and more transparent. Key elements include:
- Allowing catastrophe modeling with regulatory oversight
- Requiring greater transparency in wildfire risk scoring
- Rewarding homeowners for verified mitigation efforts
- Forcing insurers to expand coverage in high-risk areas
These reforms aim to stabilize pricing while restoring competition in distressed markets.
What Homeowners Can Do Right Now
Homeowners facing rising rates or non-renewals can take immediate steps to protect insurability:
- Install Class A fire-rated roofing and ember-resistant vents
- Maintain at least 100 feet of defensible space
- Contact your agent 90–120 days before renewal
- Combine FAIR Plan and DIC policies when necessary
- Work with independent brokers to access multiple markets
- Track all mitigation work with photos and invoices
Final Thoughts on Fire Maps and Insurance Fairness
California’s wildfire insurance crisis did not develop overnight, and it will not be resolved overnight. But the system is evolving, and so must homeowners’ understanding of how risk is measured.
As Susman summarized, once homeowners understand how accessibility, vegetation, firefighting resources, and modeling affect their premiums, they can take action to change their risk profile.
In today’s high-risk environment, education, mitigation, and transparency are essential. While insurers rely on complex models and proprietary data, homeowners still have meaningful ways to influence both their safety and their insurance outcomes.
In California’s wildfire landscape, understanding the map is the first step to changing the result.
