Respect Poverty

Why wildfires disproportionately affect America’s poor

“The overlap of wildfire risk, poverty and concentrated insurance markets should get people thinking about policies and interventions to help the most vulnerable homeowners.”
A helicopter drops water on the McKinney Fire in California.
A helicopter drops water on the McKinney Fire on Tuesday, Aug. 2, 2022, in California. The Associated Press/ Noah Berger

Story at a glance

  • In the United States, wildfires are typically concentrated in certain geographic regions.

  •  According to new research, these regions are home to many populations living in poverty.

  • Because insurance companies have moved out of wildfire-prone regions, less competition means premiums have gone up, further compounding the economic toll of the natural disasters on America’s poor.

As wildfires in the United States become more deadly and seasons stretch longer due to climate change, new research out of the University of Georgia details to what extent these natural disasters affect America’s underserved populations. 

The study found that lower-income Americans faced with canceled homeowner insurance policies and rising premiums are also at the greatest risk of wildfires. 

Following extreme wildfires in the state of California in 2018 and 2019, the discontinuance of homeowners’ policies grew as insurance companies suffered major losses in at-risk regions.

“The probability of maintaining or replacing an at-risk policy increases when a homeowner invests in fire protection measures. However, these investments are comparatively costly for lower-income homeowners,” authors explained. Moreover, “ability to recover from destructive fires is affected by the reliability of property insurance.”

To carry out their investigation, researchers assessed regions in the contiguous United States with moderate to high wildfire risk. They then compared these regions with lower-income areas and regional insurability. 

They found counties with higher wildfire risks tend to have higher poverty rates, while many of the states home to these counties only have a few available insurers, meaning once a policy has been terminated homeowners have fewer insurance options. 

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“The overlap of wildfire risk, poverty and concentrated insurance markets should get people thinking about policies and interventions to help the most vulnerable homeowners,” said co-author Matthew Auer and dean of the School of Public and International Affairs at the University of Georgia in a statement

Based on annual average acres burned between 2016 and 2020, researchers identified the 14 highest-risk states, which included: Arizona, California, Colorado, Florida, Idaho, Montana, Nevada, New Mexico, Oklahoma, Oregon, Texas, Utah, Washington and Wyoming.

In these, 98 counties had high wildfire potential, while only Oklahoma and Wyoming did not have a high-risk county. In the remaining 12 states home to high-risk counties, about 60 percent of these counties were classified as high-poverty regions based on census data. 

Geographically, counties within wildfire-prone states that also had high levels of poverty tended to be clustered together.

Providing a potential model for other states, California has taken action to provide improved insurance to wildfire survivors following the past few years of extreme fires, in addition to bolstering resources and resilience efforts in low-income communities via the Safer from Wildfires program. 

However, “an open question this research highlights is how stakeholders such as insurance companies and insurance commissioners outside of California will respond to the intertwined problems of climate-driven, destructive wildfire, insurance risk in high- and extreme-wildfire-risk areas, and the plight of low-income homeowners in these areas,” researchers wrote. 

More studies are also needed to better understand the additional environmental, public health and economic toll of wildfires on low-income communities. 

Another hurdle in protecting vulnerable populations is the disjointed handling of public and private wildfire-prone areas in these regions. 

One potential solution for insurance companies could be providing incentives in the forms of lower premiums for homeowners who adopt certain fire safety measures.

“For folks who are in poorer counties, homeowners don’t have as much flexibility, and they don’t have the ability to afford all of the wildfire prevention strategies that may be required by the few companies willing to insure homes in wildfire-prone areas,” Auer said.

“This issue hasn’t been addressed in some states, and it needs to be because the situation we see today is just going to get worse.”