Abstract
Catastrophic wildfire is an increasingly familiar phenomenon on multiple continents. In the United States, concerns about uncontrolled, destructive wildfire have prompted some major insurance carriers to cease writing new policies or to non-renew existing policies. These trends affect not only policyholders, but also, vulnerable communities that already face multiple obstacles to securing property or renters insurance. This study reviews the social and behavioral sciences literatures on wildfire risk in the United States and insurance protection by homeowners. Three categories of research emerge from the review, namely, homeowner as rational actor, wildfire governance and risk management, and wildfire and social equity. There is abundant scholarship on determinants of homeowner decisions to manage wildfire risk by self-protecting or by purchasing insurance, but comparatively little research on the policy implications of shrinking markets for insurance. Policy research on the needs of underinsured and uninsured populations is also relatively undeveloped. Overlaying Lasswell’s social process framework on the three dominant research themes, we find not only divergent research questions, models, and methods, but also, important differences in which stakeholders and stakeholder values are considered. There are opportunities for the different literatures to learn from one another, but also, to sharpen their focus on insurance as a scarce and uncertain resource amid climate change and as property development continues to expand in wildfire-prone areas.
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Notes
The increasing incidence and destructiveness of wildfire in the United States and its relationship to climate change has inspired Jennifer Francis of the Woodwell Climate Research Center to rethink the salience of “wild” in “wildfire.” “We can’t really call them wildfires anymore,” Francis remarked to the Associated Press. “To some extent they’re just not, they’re not wild. They’re not natural anymore. We are just making them more likely. We’re making them more intense” (Borenstein & Walling, 2023).
In addition to studies of homeowner mitigation behavior in response to abatement activity on adjacent public lands is homeowner behavior vis-a-vis abatement on neighboring private land. McFarlane et al. (2011) found that private mitigation was positively correlated with neighbors’ mitigation activity. Berrens et al. (2010) obtained a similar result. Steinberg (2011) found mixed outcomes in local-level efforts to reduce wildfire risks to neighborhoods and to individual homes under the mantle of Firewise Communities/USA® programs.
In 2022, 45.2 million homes were renter-occupied in the United States versus 129.9 million owner-occupied homes (U.S. Census, 2023a). More than 10 million renters live in areas prone to natural disasters, including (but not limited to) hurricanes, earthquakes, tornados, and fire (Joint Center for Housing Studies of Harvard University, 2020: 37). Drawing on data from the American Community Survey, the Joint Center for Housing Studies of Harvard University found that between 2015 and 2017, 324,000 renters were displaced by natural disasters in the United States and 500,000 rental units required substantial repairs after disasters struck (Joint Center for Housing Studies of Harvard University, 2020: 37). Apart from challenges renters may face, such as prohibitions in lease agreements that could help protect renters in wildfire-prone areas, there are other household financial stressors that impair renters’ ability to be safer from wildfire. As a very rough proxy for renters in WUI areas, consider that over 39% of renters in rural areas in the United States in 2018 were cost-burdened, meaning they paid more than 30% of income for rent and utilities (Joint Center for Housing Studies of Harvard University, 2020: 28). For comparable data, see the U.S. Census monthly Household Pulse Survey, including indicators such as “Household currently caught up on rent payments” (U.S. Census., 2023b).
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Acknowledgements
The author is grateful to Charlie Sidoti, Christopher Lowell, and Stephanie Simon for their help in identifying industry sources for this project and for their own subject-area knowledge. Support from the University of Georgia Foundation Arch Professorship is gratefully acknowledged.
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Auer, M.R. Wildfire risk and insurance: research directions for policy scientists. Policy Sci (2024). https://doi.org/10.1007/s11077-024-09528-7
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DOI: https://doi.org/10.1007/s11077-024-09528-7