The 2025 wildfire season has reached above-average activity across the United States with over 26,500 wildfires within the first 5 months of the year.
For P&C insurance experts, the scope and implications of these wildfires is crucial to predicting future fires and preparing for potential claims. This year’s fires have also highlighted the need for insurers to better understand the risks of climate change and adapt underwriting and pricing practices accordingly.
WaterStreet Company’s P&C Insurance Solutions allow carriers to access all the data needed to form predictions.
2025 Wildfires
The 2025 wildfire season in North America has so far witnessed conditions to quickly accelerate blazes.
According to the National Interagency Fire Center, 1.1 million acres have burned, supported by nearly 1,700 wildland firefighters, battling 26,500 individual wildfires this year. Wildfire mitigation efforts have turned to the Southwest and Great Basin, including Nevada, Utah, California, Idaho, Oregon and Wyoming, where dry fine fuels, low humidity and wind gusts support fast-moving wildfires.
As of today May 27th, six large wildfires require emergency responses with nine wildfires under full suppression. Current states affected include Arizona, Minnesota, California, Florida and Alaska.
In California, the year started with a devastating blaze, the Palisades Fire, affecting Los Angeles County. A total of 23,448 acres were taken by the Palisades Fire alone. To-date in 2025, California has experienced:
- 245,933 fire emergency responses
- 1,848 wildfires
- 73,952 acres burned
- 30 fatality
- 16,253 structures damaged or destroyed
Wildfires in 2025 have inflicted substantial damage to residential, agricultural and woodland areas. These catastrophes have not only caused direct property damage but have also given rise to secondary impacts, including health hazards due to poor air quality, economic downturns, and displacement of residents. This summer further underscores the importance of continuous monitoring and preparedness by insurance professionals operating in these regions.
2025 Palisades Fire
The Palisades Fire scorched over 23,000 acres, destroying more than 6,500 structures, and claiming 11 lives. It ranks among the most devastating wildfires in U.S. history despite heavy flame suppression and firefighting efforts. The burn lasted 24 days, deeply disrupting southern California.
Following the fire’s suppression, experts warn of cascading environmental impacts due to the reach of the Palisades Fire, from water contamination to disruptions in oceanic food chains.
2024 Park Fire
In California, the Park Fire has gained significant attention as greater than 350,000 acres have burned, destroying upwards of 134 structures.
Beginning in Chico and spreading northward into Butte and Tehama County, the fire experienced days of no containment followed by 12% containment as of July 28th.
The origin of the fire is suspected to be arson, caused by a flaming vehicle. Gusty, hot and dry conditions quickly escalated the fire.
2024 Riley Fire
This July in Alaska, the Riley Fire affected one of the state’s top tourist destinations, Denali National Park and Preserve, leading to the evacuation of 150 employees.
The park normally expects 3,000–5,000 daily guests during the peak season of July. The fire caused secondary issues, including power outages and poor air quality in neighboring regions. The National Park Service is aware of a 100-year fire regime across the boreal forest of Alaska. These cycles are based on the forest cycles of growth and burns.
2024 Smokehouse Creek Fire
This February in Texas, the state experienced the largest wildfire in recorded history.
The Smokehouse Creek Fire burned greater than 1 million acres, occurring during Southern Plains Wildfire Outbreak (SPWO) events. SPWO events are caused by a series of factors in the region, including low humidity, dry vegetation, above average temperatures, west-southwest winds and clear skies. The costs of the Smokehouse Creek Fire are amplified by the loss of agriculture as the fire occurred in the nation’s largest cattle-producing region. Initial agriculture losses are estimated to cost $123 million, from ranch infrastructure to grazing pictures and cattle deaths.
2023 Lahaina Fire
The Maui wildfire of 2023, named the Lahaina Fire, stands out as one of the most devastating incidents in recent memory. A combination of factors led to this high-impact tragedy, including a long-term drought with dry vegetation, low humidity on the day of the fire, and erratic winds due to nearby storms.
Insurance experts must take note of the unique challenges posed by island-based wildfires. Consider factors such as limited access to firefighting resources and the interconnectedness of local ecosystems.
The Financial Impact of Wildfires
The costs associated with firefighting efforts, evacuation operations, and property restoration strain local and federal resources across the country. Property and Casualty Insurers are inundated with claims as affected homeowners and businesses seek coverage for their losses.
The costs of wildfires are often difficult to estimate until well after the events take place. Fires that do not occur in woodlands are classified separately from forest wildfires.
The 10 costliest woodland fires in the United States by the Rocky Mountain Insurance Information Association are as follows, estimated in 2022 dollars:
- 2018: Camp Fire, CA – $12.1 billion
- 2017: Tubbs Fire, CA – $10.2 billion
- 2018: Wossley Fire, CA – $4.8 billion
- 1991: Oakland Fire, CA – $3.5 billion
- 2017: Atlas Fire, CA – $3.5 billion
These events highlight the importance of accurate risk assessment and pricing strategies by insurance experts to ensure the stability of the industry and the support of affected policyholders.
Wildfire Predictions & Prevention
The 2025 wildfire season is predicted to last deep into the year as each year fires have begun to burn sooner and last longer. Insurers must be prepared for more frequent and severe wildfires in the years to come. Better prepare for future wildfires with the following tips:
1. Fire Mitigation
Work with communities to develop fire mitigation strategies to prevent damage before it occurs. This may include moving live vegetation away from the sides of the home, clearing dead and dying branches, removing leaves and debris from the property, clearing gutters, roofs and decks of dead vegetation, and the use of metal instead of wood in building structures.
2. Improve Underwriting
Develop more sophisticated underwriting and pricing models that take into account key factors behind severe wildfires. Capture more data in the underwriting process to determine locations prone to drought and if local forests are cleared routinely for fire prevention.
3. Fast Claims Processing
Expect a surge in claims during wildfire season in states prone to wildfires and consider ways to efficiently process claims. When insurers process claims quickly, the total claims cost can be minified and the policyholder can be satisfied with their coverage.
WaterStreet Company for P&C Insurance
The 2025 wildfire season has been a stern wake-up call for the insurance industry, calling for adaptive strategies and supportive technology.
The WaterStreet Cloud-based P&C Policy Administration Suite is designed with Document Management at its core. All documents related to the policyholder are stored for simple retrieval when needed, keeping your administrators in one unified solution whether it comes to claims administration, policy administration, billing, or reporting.
Third-party integrations are essential for many carriers to bring important and supportive data into the system. These integrations can help assess location risks, provide a history of weather patterns, offer more background information on a new policyholder, allow for self-inspections, and many other unique capabilities. WaterStreet Company solutions are built with a robust API to connect to any number of third-party integrations.
Reach out to WaterStreet Company today to request a consultation and demo of our solutions.
