Lessons Europe can take from the California wildfires

Europe’s wildfires should put to rest the idea that destructive fire is confined to places with long histories of losses. 

Climate volatility is pulling wildfire into regions that never treated it as a recurring insurance risk. The same shift is visible in the US, where fires have recently affected New Jersey, Georgia and Florida. Decades of fire suppression have allowed vegetation to accumulate, while development pushes into the wildland–urban interface. 

“It won’t happen here” is no longer a credible risk strategy.

America’s real lesson is not that high-hazard areas are uninsurable, but that treating them as uniformly risky obscures the differences that matter most

The US shows the cost of failing to keep pace, nowhere more starkly than California. The Eaton and Palisades fires destroyed nearly 16,000 structures and caused roughly $40bn (£29.6bn) in insured losses – the costliest wildfire event on record and an urban conflagration that spread through dense neighbourhoods.

Before the fires, ZestyAI had scored more than 91% of the area ultimately burned by the Eaton and Palisades fires as high or very high risk for involvement in a future wildfire, and not a single impacted property fell within the lowest risk category. 

In those same areas, however, federal classifications still designate 3,045 properties, worth an estimated $2.4bn (£1.78bn), as having low or no wildfire risk, despite property-level analysis flagging elevated danger.

Individualities

Broad classifications can miss not only where risk is building, but also the differences between individual structures. 

Two homes in the same community can have different outcomes depending on their materials, fire-resistant design, vegetation clearance and nearby combustible features. 

Those differences can be measured at the individual property level rather than inferred from the surrounding geography.

“It won’t happen here” is no longer a credible risk strategy

AI-powered property intelligence can evaluate a structure as it exists today using high-resolution imagery and other property data. Relevant factors may include roof and exterior materials, vegetation within defensible zones, overhanging trees, slope and the density of surrounding structures. 

Traditional fire maps describe broad hazard conditions at a postcode or regional level and do not reflect what a homeowner may have changed. Catastrophe models estimate portfolio losses across thousands of simulated events, but they were not designed to assess the vulnerability of an individual structure.

Property-level models answer a different question: Why is one structure more likely to be damaged or destroyed than another nearby? That distinction can help insurers differentiate between more resilient and more vulnerable properties within areas that might otherwise be treated as uniformly exposed.

Property owners cannot control drought, wind or extreme heat, but they can reduce their vulnerability. 

Insurers should give homeowners more than a risk classification by explaining which property characteristics contribute to their vulnerability and which changes may reduce it. A homeowner who understands that overgrown brush or combustible fencing is increasing their risk can act, particularly when pricing rewards mitigation.

Policy

Insurers cannot reduce wildfire risk alone; public policy shapes the broader conditions through vegetation management, controlled burns, building codes and emergency planning. 

Insurers can reinforce this by recognizing property-level mitigation in pricing. California requires insurers to reflect specified mitigation measures in pricing and now allows forward-looking catastrophe models to inform rate filings, paired with commitments to expand coverage in distressed areas. 

Europe should not replicate that framework wholesale, but the principle travels well: Risk reduction should be visible, measurable and financially rewarded.

Property owners cannot control drought, wind or extreme heat, but they can reduce their vulnerability

Property-level resolution, the ability to tell the resilient home from the exposed one within the same high-hazard area, is what reinsurers are now pricing for. 

Events that once arrived once a decade now arrive every few years, and reinsurers have responded with higher prices, larger retentions and thinner capacity after bad years. 

Those pressures reach homeowners through higher premiums and reduced availability. But reinsurers are also rewarding carriers that can demonstrate property-level understanding of their exposure with more capacity and better terms; the same distinction that separates selective underwriting from broad withdrawal.

Europe does not need decades of losses to learn what the US already has. Predictive models, property-level data and lessons from established wildfire markets already exist.

The US’s real lesson is not that high-hazard areas are uninsurable, but that treating them as uniformly risky obscures the differences that matter most. 

Assess hazard and vulnerability property by property, reward mitigation and price with precision, and European insurers can manage this risk before the market is forced to retreat.