A Case of Frustration for All Stakeholders Involved: the Situation of Wildfire Insurance in Marin County

Over the course of several Fridays during fall quarter, Bill Lane Center summer research assistants are gathering at our weekly American West Research Seminars to present about the projects they pursued in June, July, and August of 2023. Lilly Salus, '26, shared her work on wildfire insurance and reflects more on that research below.

Lilly Salus (she/her)
Hometown: Berlin, Germany
Area of study: Data Science and East Asian Studies, ‘26
Research project: Addressing barriers to mitigating wildfire impacts in Marin County and beyond

Before coming to Stanford I had only ever seen a wildfire once. I remember watching as the wildfire consumed more and more forest from the relative safety of the mountain opposite  the one burning. After coming to Stanford, I kept stumbling upon people discussing and worrying about the wildfires that were wreaking havoc only one or two hours’ drive away from campus. Therefore, when the opportunity came up to study wildfires with the Bill Lane Center this summer, I decided to take it. 

Within my wildfire research group, I focused on wildfire insurance so that I could combine my interest in economics with my summer research. The conclusion I reached — that no stakeholder is satisfied with the current situation — was eye-opening. Due to the increasing severity of wildfires, insurance companies have started charging people who live in high-risk areas higher prices or even sent them notifications of non-renewal. Of course, this has caused a lot of frustration among the consumers. However, simultaneously, the story of the insurance companies is one of regulation and decisions being made based on outdated data models.

In the first few weeks at the Bill Lane Center my research was focused on Firewise Communities. These are a medium of action that the people who live in high wildfire-risk areas have used to decrease the risk of their house burning down. Marin County has an unusually high number of Firewise Communities—13% of California’s Firewise Communities are located in Marin County, despite Marin’s relatively small population. During my first few weeks, Firewise Communities to me seemed like the one solution to the problem of the high cost of wildfire insurance. The risk of houses located in wildfire-prone areas burning down due to wildfires would be reduced, which would mean that insurance companies can afford to charge lower rates, which in turn would make homeowners happy. 

However, although some Firewise Communities are very active, an interview with Rich Shortall, the executive director at FireSafe Marin (the organization that coordinates Marin’s Firewise Communities) revealed that the same can unfortunately not be said of all of Marin’s Firewise Communities. All Firewise Communities only have to fulfill the national guidelines to become certified. These regulations are not very high and mostly focused on public education. According to Shortall, Marin’s Firewise Communities have been very successful in creating a level of engagement and education in Marin that was not there previously, but in order to decrease the risk of wildfires in the long-term, requirements such as five-foot defensible spaces that are implemented and checked through regular and independent home investigations are necessary. For now, though, that is not the case, and this also explains why only a very small number of insurance companies provide discounts to homeowners who are members of Firewise communities.

Although Firewise Communities likely aren’t the long-term solution to decrease the losses due to wildfires in Marin I initially thought they could be, my belief remains that they can play an important role. My research experience at the Bill Lane Center this summer therefore showed me the importance of taking into account all sources of information when conducting research as well as considering all sides of the story. Aside from a better understanding of the interplay between nature and human civilization in California, especially through my research on Firewise Communities where the interview with Rich Shortall of FireSafe Marin provided a nuanced viewpoint that the numerical data I had gathered could not represent, I gained a deeper respect for how qualitative and quantitative research can build on each other.