Homeowners Insurance
Cost of Suppressing Wildfires Up 200% Over Past 20 Years
As climate change worsens, the growing threat of wildfires is putting the heat on America’s pockets. According to the latest ValuePenguin study, the cost of fire suppression has risen by 200.7% over the past 20 years. Not only that, the number of acres burned in wildfires caused by human activity is also on the rise.
In this study, we’ll go over which firefighting regions have the highest annual averages of acres burned and which areas saw the greatest jumps in averages. Additionally, stick around to learn more about how wildfires may affect your homeowners insurance.
On this page
- Key findings
- Cost of suppressing wildfires has doubled over 20 years
- Number of acres burned in human-caused wildfires has jumped 61.9%
- By firefighting region, Alaska has highest yearly average in acres burned
- Northern California saw a 780% increase in average acres burned
- How wildfires impact home insurance rates: What to know
- Methodology
Key findings
- Over the past 20 years, the cost of fire suppression has increased by 200.7%. Between 1998 and 2002, federal spending on fire suppression averaged $993,951,600 annually. Between 2018 and 2022, that figure ballooned to $2,989,051,200 annually.
- The number of acres burned in human-caused wildfires in the U.S. has jumped 61.9% since the early 2000s. From 2002 through 2006, an average of 2,378,068 acres burned annually. From 2018 through 2022, that figure was 3,850,811.
- Across the 10 wildland firefighting geographic areas, Alaska has had the highest yearly average of acres burned in human- and lightning-caused wildfires. An average of 1.6 million acres have burned annually dating to 2002. More specifically, Alaska had the highest number of acres burned in 2004 (6.5 million) and 2015 (5.1 million).
- Northern California saw the largest increase in average acres burned. Between 2002 and 2006, an average of 151,885 acres burned annually in Northern California. Between 2018 and 2022, however, that figure rose to 1.3 million acres — a 780.0% increase. Following that, the Northwest also saw a large increase in acres burned, rising from 574,929 acres annually to 1.1 million acres annually — a 98.4% increase.
- One reason for the rising cost of fire suppression could be that homes are more likely to be built in regions with more significant wildfire dangers. According to the U.S. Census Bureau, 25.7 million new housing units were built in the U.S. between 2002 and 2022. Of these, 74.2% were built in the West and South and just 25.8% were built in the Midwest or Northeast. While there are notable differences between the U.S. Census Bureau regions and the National Interagency Coordination Center regions, the Eastern firefighting geographic area (which covers the Midwest and Northeast) consistently had the lowest average number of acres burned.
Cost of suppressing wildfires has doubled over 20 years
Firefighting costs are on the rise. In fact, over the past 20 years, the cost of fire suppression has risen by 200.7%.
To put that in perspective, federal spending on fire suppression averaged almost $994 million annually between 1998 and 2002. Between 2018 and 2022, meanwhile, that figure rose sharply to nearly $3 billion annually.
Cost of suppressing fires by year
Year | Number of fires | Acres burned | Total costs | % change |
|---|---|---|---|---|
| 1998 | 81,043 | 1,329,704 | $416,704,000 | N/A |
| 1999 | 92,487 | 5,626,093 | $515,516,000 | 23.7% |
| 2000 | 92,250 | 7,383,493 | $1,410,802,000 | 173.7% |
| 2001 | 84,079 | 3,570,911 | $952,696,000 | -32.5% |
| 2002 | 73,457 | 7,184,712 | $1,674,040,000 | 75.7% |
| 2003 | 63,629 | 3,960,842 | $1,327,138,000 | -20.7% |
| 2004 | 65,461 | 8,097,880 | $1,007,244,000 | -24.1% |
| 2005 | 66,753 | 8,689,389 | $818,954,000 | -18.7% |
| 2006 | 96,385 | 9,873,745 | $1,704,477,000 | 108.1% |
| 2007 | 85,705 | 9,328,045 | $1,620,145,000 | -4.9% |
| 2008 | 78,979 | 5,292,468 | $1,585,856,000 | -2.1% |
| 2009 | 78,792 | 5,921,786 | $920,529,000 | -42.0% |
Source: ValuePenguin analysis of National Interagency Fire Center (NIFC) data
ValuePenguin home insurance expert Divya Sangameshwar attributes this rise to climate change.
"Fires — especially wildfires — are growing more intense and frequent," she says. "Sadly, the United States is burning through funds to manage these costly blazes. As fire seasons grow longer and new swaths of the country are vulnerable to fires, fire suppression is going to continue to get more expensive."
In addition to the greater frequency of wildfires, more federal disaster declarations also contributed to rising costs.
There are three major types of disaster declarations for wildfires, according to the Congressional Budget Office (CBO). They are:
- Fire management assistance declarations, which allow state and local governments to request fire management assistance grants (FMAGs). This is the most common type of disaster assistance, but grants awarded through these declarations offer the smallest average financial assistance across all three disaster declarations.
- Emergency declarations, which allow governments to rely on federal resources to provide emergency services or to lessen the threat of an ongoing fire. Emergency declarations are made if a fire exceeds the response capabilities of state and local governments. Under these declarations, the federal government pays the entire cost of individual housing assistance for affected families and 75% of public assistance costs or other costs.
- Major disaster declarations, which allow governments to rely on federal resources to provide housing aid to affected individuals and households. Federal aid also includes crisis counseling, unemployment assistance, legal services and food assistance. These declarations are made when fire damage is so severe that it’s beyond the capacity of state and local governments to respond.
Disaster declarations have risen in all three categories. Between 2001 and 2005, there were 243 fire management assistance declarations, no emergency declarations and five major disaster declarations. Between 2016 and 2020, there were 266 fire management assistance declarations, four emergency declarations and nine major disaster declarations.
Number of acres burned in human-caused wildfires has jumped 61.9%
It’s not just the costs of fighting fires that are rising — wildfires caused by humans are growing in frequency and severity. Between 2002 and 2006, an average of 2,378,068 acres burned from human-caused fires annually. From 2018 through 2022, that figure jumped to 3,850,811 — a 61.9% increase.
According to the CBO, the majority of wildfires are caused by human activity. Between 2001 and 2021, human actions — such as negligence, arson, burning debris and malfunctioning equipment — accounted for 86% of wildfires. Meanwhile, lightning (the only other ignition source recognized by fire authorities) accounted for the remaining 14% of wildfires. However, lightning-caused fires, which tend to be larger, accounted for 59% of acres burned during this period.
Total acres burned in human-caused fires by year
Year | Total acres burned |
|---|---|
| 2002 | 62,022 |
| 2003 | 50,815 |
| 2004 | 54,101 |
| 2005 | 58,430 |
| 2006 | 80,220 |
| 2007 | 73,446 |
| 2008 | 70,093 |
| 2009 | 69,650 |
| 2010 | 64,807 |
| 2011 | 63,877 |
| 2012 | 58,331 |
| 2013 | 38,349 |
Source: ValuePenguin analysis of NIFC data
In addition to the increased risk and extent of wildfires due to climate change, it’s worth noting that human-sparked fires tend to move twice as fast as wildfires started by lightning. Besides typical human activities, gender reveal parties have also caused major fires in recent years.
These parties, popularized through social media, often involve the use of explosives to reveal a child’s gender. Of the notable fires caused by gender reveal parties, the El Dorado Fire in California (caused by a smoke bomb used during a gender reveal party in 2020) resulted in the burning of over 22,000 acres. Meanwhile, the Sawmill Fire in Arizona started after someone fired a rifle at a target filled with an explosive substance during a gender reveal party in 2017, resulting in nearly 47,000 acres burned.
By firefighting region, Alaska has highest yearly average in acres burned
According to the National Interagency Fire Center (NIFC) data, there are 10 wildland firefighting geographic areas. These areas are separated to help mitigate costs and mobilize firefighting resources efficiently.
Across all 10 regions, Alaska has had the highest yearly average of acres burned in human- and lightning-caused wildfires. On average, Alaska has seen 1.6 million acres burned per year since 2002.
Total acres burned in Alaska by year
Year | Total acres burned |
|---|---|
| 2002 | 2,176,665 |
| 2003 | 559,332 |
| 2004 | 6,523,817 |
| 2005 | 4,440,149 |
| 2006 | 266,266 |
| 2007 | 525,017 |
| 2008 | 62,648 |
| 2009 | 2,951,597 |
| 2010 | 1,125,419 |
| 2011 | 293,018 |
| 2012 | 286,887 |
| 2013 | 1,316,876 |
Source: ValuePenguin analysis of NIFC data
While that figure’s alarming, it’s not necessarily bad. In fact, because large portions of Alaska are remote and unpopulated, fire managers in Alaska have generally allowed wildfires to burn without intervention. Not only is it a cost-effective measure, but it’s also helpful for the fire-dependent ecosystems in Alaska.
Why Alaska, though? It's a region one wouldn’t typically consider when thinking of wildfires. But the reason largely boils down to plant life. Alaska is dominated by boreal forests, a fire-prone woodland biome. And Alaska is particularly prone to thunderstorms — in fact, fires started by lightning are responsible for 90% of the acreage burned in Alaska. As climate change worsens, lightning activity is also increasing, raising the risk of fires across Alaska.
Alaska had the highest number of acres burned in 2004, at 6.5 million. That year, Alaska experienced a warmer-than-average May. Additionally, interior Alaska received more than three times the normal amount of rain. Then, lightning strikes, high temperatures, dry winds and an unusually dry August created favorable conditions for wildfires to ignite and spread.
In 2015, Alaska again had the highest number of acres burned, at 5.1 million. Just like a decade earlier, there was a warmer-than-normal spring that year. With hot and dry conditions, an unprecedented week-long lightning event led to nearly 300 fires — leading to 3.5 million acres burning in just two and a half weeks.
Northern California saw a 780% increase in average acres burned
Although Alaska consistently saw the highest number of acres burned, Northern California saw the largest increase in average acres burned.
Between 2002 and 2006, an average of 151,885 acres burned annually in Northern California. That figure rose to 1.3 million acres between 2018 and 2022 — a 780.0% increase.
Climate change is likely to blame for this increase. As the climate grows hotter and drier, the likelihood of fires in traditionally hot, dry regions like Northern California continues to rise. In fact, the 10 largest California wildfires have occurred in the last 20 years — and five of these occurred in 2020 alone.
Following that, the Northwest also saw a large increase in acres burned. The number of acres burned rose from 574,929 annually to 1.1 million annually during the same period, a 98.4% increase.
According to Sangameshwar, there are many insurance implications for homeowners in fire-prone areas — and they go beyond rising premiums.
"Homeowners in these areas are also finding it harder to get coverage, with many insurers refusing to underwrite policies for homes in areas they consider very high fire risk," she says. "Major insurers have also started pulling out of these markets completely, citing mounting losses. This puts homeowners at significant financial risk from being underinsured or uninsured."
New housing units more likely to be built in regions with higher threat of wildfires
Another potential reason the cost of fire suppression is rising? New homes are more likely to be built in regions with more significant wildfire dangers.
Between 2002 and 2022, 25.7 million new housing units were built in the U.S., according to the U.S. Census Bureau. Of these, 74.2% were built in the West and South. Meanwhile, just 25.8% were built in the Midwest or Northeast.
While there are notable differences between the U.S. Census Bureau regions and the National Interagency Coordination Center regions, the Midwest and Northeast are largely covered under the Eastern firefighting geographic area. This region consistently had the lowest average number of acres burned, with just 63,929 acres burned in 2022. For comparison, Northern California — which had the highest number of acres burned during that time — saw over 1.3 million acres burned in 2022.
How wildfires impact home insurance rates: What to know
Fire risk is on the rise for many homeowners — whether they realize it or not.
"The sharp increase in acres burned reflects a new reality for many homeowners, who may be living under the assumption that their homes are reasonably safe from wildfires," Sangameshwar says. "In 2022, 50% of homes across the United States faced some level of wildfire risk, and the number of homes at risk will grow by 11% by 2050 due to the impact of climate change."
With 1 in 2 American homes at risk from fires, Sangameshwar says it’s going to get harder and more expensive for people to insure their homes. The biggest risk homeowners face, however, is losing their homes permanently after a fire, especially if their costs won’t be covered by insurance. In fact, only 25% of homes are rebuilt within five years after a wildfire — and with rising costs and interest rates, that percentage could decrease.
With these risks in mind, Sangameshwar offers the following advice for homeowners:
- Pay attention to the defensible space immediately surrounding your home. This includes steps like removing all combustible items like vegetation and firewood that are less than 5 feet away from your home structure. "It also means rebuilding parts of your home with nonflammable materials, including your deck or your fence, and keeping your yard clear of all debris," she says. "In fact, FEMA has a very comprehensive checklist for homeowners looking to reduce their risk from wildfires, which homeowners should print out and check regularly."
- Call up your insurer (for both your home and your car) regularly to review your policy and its coverage. "In many cases, homeowners insurance will cover fire, smoke and ash damage to your home and personal property, but your car will only be covered if you have a comprehensive policy," she says. "It’s also important to note that more insurers are requiring policyholders to purchase separate fire insurance. In general, you should always know how much protection your insurer offers before a catastrophe hits because you can’t retroactively apply insurance."
Methodology
ValuePenguin researchers analyzed National Interagency Fire Center data.
Researchers calculated five-year averages for federal spending on fire suppression (using available data from 1985 through 2022) and determined percentage changes in these periods. We also calculated year-over-year percentage changes.
Additionally, we calculated five-year averages for the number of acres burned in human- and lightning-caused wildfires (using available data from 2001 through 2022) at the geographic level and determined percentage changes in these periods. We also calculated the average number of acres burned yearly across each geographic area.
Data on new housing construction comes from the U.S. Census Bureau and was available through 2022.