California needs to fight fire smarter.

Currently, 11.2 million people and 4.5 million homes in California are on land adjacent to wilderness lands, a region firefighters refer to as the wildland urban interface, or WUI. As recent years have shown, the risk to those who live in WUI and their property is potentially catastrophic.

So what can be done? Communities, government agencies and the insurance industry must work together to establish consistent standards and align economic incentives to encourage people to meet them.

Fire mitigation standards have never been consistently established or enforced across California’s WUI. Even though we’ve long known, for example, that creating defensible space — a buffer between a building and any wildland surrounding it — and home hardening measures — which prevent sparks and embers from infiltrating a home’s walls — are effective fire prevention tactics, WUI residents do not implement them uniformly. Why? Look no further than the divide between local and state government.

Depending on which government agency or department is responsible, fire mitigation requirements are different. Two homes that share a property line, for example, can be inspected to different standards if one home is in a “local responsibility area” and the other in a “state responsibility area.” If a home in a state responsibility area is also included in a specific fire district, it can be inspected by both the local fire department and Cal Fire — again, with each using a different standard. On top of that, an insurance inspector then shows up using yet another standard unique to that a specific carrier. The result is confusing directives, which only discourages residents from implementing any measures at all.

Another contributing factor is that even with these numerous standards, government enforcement has only so much reach. With limited resources, any government agency’s capacity to enforce standards is restricted to only a few thousand of the at-risk properties — nowhere near the scale required to make an impact on its own. And while there are valiant fire mitigation education efforts from Cal Fire, local government, California Fire Safe Councils, Firewise USA groups and others, these efforts cannot compel enough people to improve their fire safety practice at the scope or pace that is needed.

All of this confusion around standards and their implementation makes it nearly impossible then for the insurance industry to accurately price fire risk. According to a 2019 white paper from the management consulting firm Milliman, California homeowners insurers lost 26 years of profit just in 2017 and 2018 due to wildfires, resulting in a net loss of $10 billion. Losses this big create market instability: Insurers are beginning to leave the California market and for those that remain, they are either increasing their nonrenewals or increasing the premiums on those they still insure.

As for those who can’t find an insurer, they’re left with the California FAIR Plan, the “insurer of last resort,” which has high premiums and limits on coverage. In 2020, the number of consumers forced to obtain a policy through FAIR increased by 49,049 policies.

But neither shifting consumers to FAIR nor increasing premiums on current insurance policies makes progress toward the ultimate goal of limiting losses or lowering fire risk.

A far more effective approach to decreasing fire risk would be to financially incentivize homeowners to implement effective measures like fuel mitigation and home hardening. The annual need to find or renew property insurance creates an opportunity for the rapid adoption of these and other techniques.

Currently, insurance companies determine risk based upon the general characteristics of a landscape, the area’s firefighting capacity and conditions on the individual parcel being assessed. But since carriers use their own standards and lack a mandate to understand parcel-level conditions throughout a given landscape, they cannot accurately characterize the fire-safety conditions around any given parcel — particularly ones located in high- to moderate-density neighborhoods where fire has the potential to spread quickly.

A consistent and accessible common standard of parcel-level wildfire risk reduction measures addressing both defensible space and home hardening retrofits can reduce wildfire losses and make insurance policies more accessible. If government agencies can adhere to a standard implementation of science-backed mitigation techniques and create a common verification process, insurers will be able to accurately assess fire risk in California’s WUI and integrate that information into their underwriting decisions. Homeowners who meet those standards at community scale will then be rewarded with average annual loss calculations which accurately price the residual risk encouraging further community-wide adoption of best practices.

As long as wildfire continues to create large losses for insurers, we will continue to face a volatile insurance market where many Californians will experience increased premiums, policy nonrenewals, and decreased options, regardless of whether they experience direct wildfire loss. Stabilizing this situation must start with a better understanding of wildfire risk on a property by property and neighborhood basis, combined with greater reliance on mitigating that risk to protect lives.

Life and property loss have become hallmarks of our state’s fire season. To stave off catastrophic loss, we need a holistic approach with established standards and that incentivizes Californians to meet them. That is our best shot.