Conflagration modeling can add 40 points to wildfire risk scores

Cotality's 2026 Wildfire Risk Report, covered by Carrier Management, counts 2.5 million U.S. properties and $1.4 trillion in replacement cost sitting in wildfire exposure. California's 1.28 million at-risk homes carry $850 billion of that total. The geography is widening, though: 49.9% of at-risk properties across the ten most exposed states sit outside California. Colorado and Texas together hold nearly 560,000 at-risk properties and $252 billion in replacement value — about the same as the $277 billion spread across the other seven states. Los Angeles remains the largest exposed metro, with roughly 250,000 at-risk properties and $209 billion in replacement cost.

The report's sharpest point is what it calls a blind spot: conflagration, the process by which fire leaves wildland and jumps from home to home. Layering that dynamic onto a traditional wildfire score can add as many as 40 points, Cotality says, pushing meaningful hazard risk into neighborhoods that older maps labeled low risk. For ILS underwriters, that spread is the gap between a tranche that looks safe and one that inherits a tail.

Mitigation data shows the same pattern. Homes in the top tenth of Cotality's property-level mitigation score carry expected losses about 78% below the statewide average; the bottom tenth runs more than ten times that average, roughly $47 of expected loss for every $1 on the best-prepared homes. Property-level construction and upkeep, in other words, carry real weight.

The 40-point divergence becomes a trigger-design question. Conflagration losses concentrate in specific neighborhoods, so a per-occurrence contract writing on industry aggregate loss may capture them while a zone-based trigger could pay late or not at all. Cotality's report does not answer that; it sharpens the question.