Cotality California Wildfire Risk 2026: Beyond Exposure

Cotality estimates that about 1.28 million California properties face moderate or greater wildfire risk in its 2026 analysis, representing roughly $850 billion in reconstruction cost value. The figures, released August 12, measure rebuilding exposure; they do not predict losses or establish an insurance premium, a coverage offer or a sale-price discount.

What the California exposure figures measure

The report uses proprietary models from Cotality, which sells property analytics. Its exposure analysis selects parcels with a postburn wildfire risk score of 51 or higher, the company's threshold for moderate or greater risk. Postburn scoring reflects recent burn conditions; its preburn view represents longer-term baseline conditions. The score is a model classification, not a percentage probability that a home will burn. Cotality's report explains the selection method.

In Cotality's metropolitan ranking, Los Angeles leads with nearly 250,000 qualifying properties and about $209 billion in reconstruction cost value. California accounts for six of the ten leading metropolitan areas. These figures cover metropolitan areas, not just properties within city boundaries.

The counts show the amount of exposed property, not the share of each market exposed. Use them to focus California housing research, then investigate individual addresses. Neither the exposure ranking nor the report's mitigation analysis is a survey of insurance offers or completed home sales.

What reconstruction cost value can tell you

Reconstruction cost value, or RCV, estimates the expense of rebuilding a structure after destruction. Labor, materials and local construction conditions matter. Cotality's July 8 valuation explainer also identifies debris removal, restricted site access, specialized craftsmanship and code upgrades as reconstruction considerations.

RCV differs from market value: land's purchase value is outside the structural rebuilding calculation. Personal belongings and temporary housing also need separate coverage review. The California Department of Insurance's residential insurance guide distinguishes dwelling, personal-property and loss-of-use protection. An RCV total is therefore not an all-inclusive recovery budget.

For a specific property, request an itemized estimate showing demolition, code compliance and any allowance for post-disaster construction-price increases. The statewide total cannot substitute for that scope of work.

An exposure total also lacks the event probabilities and damage assumptions needed to forecast losses. Adding rebuilding estimates across properties does not mean all those properties will be destroyed or that insurers would pay that amount.

Why density and mitigation matter to vulnerability

Cotality's May 21 model explanation distinguishes its base wildfire score, based on fuels, topography and climate, from separate assessments of conflagration—fire spreading among structures—and mitigation. Ask which output you have and whether it incorporates building details and mitigation. An address-specific score is not automatically a complete vulnerability assessment.

In the company's August 12 discussion, hazard specialist Jamie Knippen explains that buildings can become fuel once wildfire enters a neighborhood. Structure density, building characteristics, wind and weather therefore matter alongside vegetation and terrain. Clearing one lot cannot remove the exposure created by nearby combustible structures.

Cotality's separate analysis of 6.8 million California single-family residences finds modeled expected losses about 78% below the statewide average among the best-mitigated tenth of homes. The company reports this as a modeled loss-cost comparison.

That finding supports investigating mitigation, but it does not establish that a particular retrofit cuts one home's losses by 78%. The groups differ; this is not a controlled before-and-after test. Nor does it establish an equivalent percentage reduction in premiums.

For an acquisition or building project, request documentation of roof materials, vents, nearby combustible features and completed mitigation. Pair a site inspection with questions about neighboring buildings and community work. A property's recorded characteristics deserve as much scrutiny as its score.

How a public hazard map differs from a property risk model

CAL FIRE's December 2024 methodology FAQ describes Fire Hazard Severity Zones as a view of conditions over 30–50 years. The maps consider fuels, terrain, weather and embers, while excluding home hardening, recent wildfire and fuel-reduction measures. They do not model individual structure losses using details such as roof type.

A home hardened against wildfire can therefore remain in a high-hazard zone while having lower modeled vulnerability. A public classification cannot substitute for an assessment of the building.

The maps serve planning and fire-safety purposes. Department of Insurance guidance says insurers use separate risk tools for coverage and pricing decisions. Builders should check the adopted local designation and applicable requirements with the jurisdiction; a favorable proprietary score does not settle the permitting question.

Establish the costs for the property decision

California's wildfire pricing regulation, announced October 17, 2022, requires recognition of qualifying mitigation through discounts and provides risk-score disclosure and appeal rights. Ask which measures the insurer recognizes, what evidence it needs and how to challenge incorrect property information.

Those protections do not guarantee coverage or turn Cotality's published score into a quote. Have a licensed insurance professional assess the address and intended use before relying on an insurance allowance.

Keep three questions separate in the transaction file:

• Can coverage be placed? Obtain written terms, effective dates and any outstanding inspections or conditions. Lenders should confirm that proposed coverage meets their requirements.
• What must the budget carry? Compare premiums alongside limits, deductibles and exclusions. Price immediate mitigation and ongoing maintenance separately.
• What supports the purchase price? Use comparable sales and location-specific market research. The report supplies no estimated sale-price effect to apply to a listing.

For a hypothetical rental, a verified annual premium that exceeds the acquisition budget's annual insurance allowance by $3,600 reduces cash flow by $300 a month, assuming everything else stays unchanged. Use the verified premium in the assessment of insurance and total ownership costs, and show mitigation spending and potential out-of-pocket losses separately.