In their 1999 paean to California, the Red Hot Chili Peppers sang that “Destruction leads to a very rough road, but it also breeds creation.” The rock band was referring to earthquakes and tidal waves, but in the intervening years wildfires have been the destructive force in California, typified most tragically by the 2017 Camp Fire in Paradise that consumed nearly 19,000 structures and caused 85 fatalities.
Executive Summary
As carriers pull back insurance for new homes and businesses in the Golden State, property risk analytics tools are changing the understanding of wildfire damage risks.Here, insurance journalist Russ Banham talks to ZestyAI Co-Founders Attila Toth and Kumar Dhuvur about wildfire risk scores available from the InsurTech. Banham also gets an assessment of the wildfire risk exposure on his own California home—and advice from Toth about measures he can take to lower it.
The catastrophic risk of wildfires recently impelled two of the five largest insurers in the state to stop writing new property insurance policies for homeowners and businesses, and one of the top five to cap the number of policies it will write. Wildfire risks also have bred creation, evident in more innovative ways to understand wildfire property risks.
A case in point is ZestyAI, an InsurTech that uses aerial imagery and AI to model the vulnerability of structures on a building-by-building basis. By offering its data-driven insights to insurance carriers, the information can then be passed on to policyholders to reduce their homes’ vulnerability to fire damage and destruction. The mitigations may even create more competition in the fading insurance market, possibly reducing the high cost of insurance for many homeowners and businesses.
