Insurance Journal: Hawaii Fire Deaths Exceed 100 as Scale of Disaster Continues to Come into Focus
Wildfire
Background
With warmer, drier conditions experienced during longer fire seasons, the effects of wildfires on both properties and human life have increased, leaving many homeowners and communities unprepared. According to Verisk’s 2019 Wildfire Risk Analysis, nearly 4.5 million homes in the U.S. are at high or extreme risk of wildfires, 2 million of which are in California alone. [1] Wildfire risk is also increasing throughout the country as newer homes are built near wildlands. The “wildland-urban interface” (WUI)—the transition areas between unoccupied land and human development—is growing in size and putting communities at greater risk for wildfire. From 1990 to 2010, the WUI increased from 30.8 to 43.4 million homes and expanded in surface area from 143,568,227 acres to 190,271,144 acres. [2]
Wildfires cause widespread physical damage and pose public health and environmental risks. The smoke from these fires contain very fine particles, and when inhaled, can cause serious chronic respiratory problems. [3] Additionally, climate change has contributed to the rise of megadroughts; droughts that last for decades. These megadroughts have become especially common in the Southwest region of the U.S., where normal weather conditions had already included high temperatures and low precipitation. [4] These megadroughts create the perfect conditions for wildfires to form. During the summer of 2021, roughly 100 percent of the western U.S. was in a drought [5], the region’s worst since 800 A.C.E. [6] These droughts make the region even more sensitive to the emergence of wildfires and cause the dangers that wildfires impose on people and property to intensify.
Solutions
A recent U.N report on wildfires found that it is impossible to eliminate the risk of wildfires. [7] Instead, it states that efforts should be focused on fuel management and wildfire mitigation. Policymakers must collaborate with and allow for private sector innovation and participation. To ease the financial risk of wildfires to taxpayers and homeowners, private companies can implement weather-risk transfer contracts in sectors and locations vulnerable to wildfire risk. Such a move will help mitigate costs of weather sensitivities across various industries and assist homeowners and renters to better understand the risks associated with properties. The methods employed in building new and modernizing existing homes and businesses also merit reconsideration. Climate-resilient buildings can save crucial taxpayer dollars. Adapting construction practices to meet the demands of a changing climate and incentivizing projects that increase the resilience of existing structures are logical steps that better protect our communities and will prove to be cost-effective over time.
Significant steps should also be taken to protect homeowners and renters from and inform them of wildfire risk. Policymakers should require enhanced disclosures on real estate transactions so that homebuyers and renters better understand the catastrophic risks associated with properties.
Supporting buyer education will create a more informed purchasing decision that energizes homeowners to implement pre-disaster mitigation strategies, such as installing drought-tolerant and fire-resistant landscaping around their property. Beyond education, tax holidays and tax-preferred savings accounts for disaster supplies can serve as incentives to promote disaster preparedness.
Policy Recommendations
- Adopt research-based methods to increase fire safety and build resilient communities.
- Promote federal incentives for projects that increase resilience to wildfire risk.
- Require enhanced disclosures on real-estate transactions.
- H.R. 1936, the Climate Resilient Communities Act, to reduce the risk of catastrophic wildfires, along with smoke and economic losses that wildfires cause, and require the GAO to issue a report on how FEMA considers climate resiliency.
- H.R. 2760 and S.1282, the Built to Last Act, to improve infrastructure resiliency by ensuring that standards-developing organizations that issue building codes have access to forward-looking meteorological information, including data on wildfires and other environmental trends, from NIST and NOAA.
- H.R. 4675 and S. 2432, the Disaster Mitigation and Tax Parity Act of 2021, to exclude from gross income, for income tax purposes, any qualified catastrophe mitigation payment made under state-based catastrophe loss mitigation programs.
