The Wildfire Insurance Coverage Study Act of 2025 requires the Comptroller General to conduct a comprehensive study of wildfire risk in the United States and how private insurance markets cover wildfire damages. The study will look at risk trends, how private insurers have adjusted rates or policy terms, and how state regulators have responded to these changes.
It will also evaluate the feasibility and usefulness of a national map for measuring wildfire risk and identify existing programs that measure risk and forecast event likelihood.
At a Glance
What It Does
It directs the GAO, in consultation with the Federal Insurance Office and state insurance regulators, to conduct a study of wildfire risk, insurance coverage for wildfire damages, and related regulatory responses.
Who It Affects
State insurance regulators, private insurers, homeowners and commercial property owners in wildfire-prone areas, and federal policymakers who oversee insurance and disaster programs.
Why It Matters
The findings will illuminate how wildfire risk translates into insurance affordability and availability, informing potential policy options for regulators and lawmakers.
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What This Bill Actually Does
The bill creates a formal, year-long study led by the GAO to map the landscape of wildfire risk and the private insurance market’s response to that risk. It requires coordination with the Federal Insurance Office and state regulators to build a 360-degree view of risk, pricing, and policy decisions related to wildfire damages.
The study asks four core questions: how wildfire risk is evolving, how homeowners and commercial property coverage has changed over the last decade, what regulatory actions states have taken in response to premium changes or coverage exclusions, and what underwriting challenges insurers face when assessing wildfire risk. The aim is to produce a robust evidence base that could guide future policy options to improve affordability and availability of wildfire coverage.
A final report is due within one year of enactment.
The Five Things You Need to Know
The bill directs GAO to study wildfire risk and insurance coverage, including trends in risk and potential mitigation practices.
It analyzes private coverage for wildfire damage and changes in rates, cost-sharing, and policy non-renewals over the prior decade.
It examines state regulatory responses, including rate regulation, moratoria, and subsidies.
It addresses underwriting challenges and solvency risks tied to wildfire losses.
GAO must deliver its findings to Congress within one year of enactment.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Risk assessment: wildfire risk and forecasting
The GAO must analyze the extent and nature of wildfire risk in the United States. This includes identifying trends in Fire Management Assistance declarations, looking at geography, costs, probability, and frequency of wildfire disasters. It also requires identifying mitigation practices that could reduce costs and risk, cataloging existing federal and state programs that measure wildfire risk and forecast events, and assessing the need for a national wildfire risk map.
Existing state of coverage: private market trends
This section covers how private insurers have adjusted rates, policyholder cost-sharing, or both for wildfire damage coverage over the 10-year period ending on enactment, as well as areas where rate changes or non-renewals have occurred. It also looks at contributing events and economic factors, cases where coverage has been curtailed or exclusions added, and how coverage is maintained or modified with mitigation requirements.
Regulatory responses: state actions
The study reviews actions by state insurance regulators in response to increased premiums and exclusions. It examines moratoria on rate or cost-sharing changes, requirements for wildfire coverage in homeowners policies, residual market mechanisms, subsidies, and other regulatory tools. The goal is to assess effects on availability and affordability and the overall sustainability of state-level responses.
Underwriting challenges: risk modeling and solvency
This part analyzes the challenges insurers face when underwriting wildfire risk, including correlated risks, data quality for risk modeling, and the potential impact on solvency. It considers how premiums influence housing affordability in wildfire-prone areas and what policy tools—such as reinsurance, data improvements, or targeted subsidies—could mitigate these challenges.
GAO report to Congress
Not later than one year after enactment, the Comptroller General must submit a report to Congress detailing the study’s findings and conclusions. This final report should synthesize risk assessments, market responses, regulatory actions, and underwriting challenges to inform future policymaking.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Congress gains a clear, data-driven picture of wildfire risk and insurance market dynamics to inform potential legislation and oversight.
- Federal agencies (including the GAO and the Federal Insurance Office) benefit from a comprehensive, authoritative data set to guide policy development.
- State insurance regulators obtain a nationwide, comparative view of how regulatory actions have influenced rates, availability, and coverage, aiding state policy design.
- Private insurers receive structured data and analysis that can clarify market trends and inform strategic decisions in high-risk regions.
- Homeowners and commercial property owners in wildfire-prone areas benefit from a transparent assessment of risk trends and potential mitigation incentives that could affect affordability and access to coverage.
Who Bears the Cost
- Private insurers may incur data collection and coordination costs to support the study.
- State insurance regulators would need to allocate resources to provide data and assist with GAO inquiries.
- The federal budget bears the ongoing cost of GAO staffing and administration to execute the study and produce the final report.
- Any policy changes that arise from the study could shift costs and obligations for insurers and consumers in wildfire-prone areas.
Key Issues
The Core Tension
Balancing the need for rigorous, high-quality data on wildfire risk and insurance coverage with the desire to preserve private market participation and affordability for homeowners and businesses in wildfire-prone areas.
The bill is a study-based measure. Its impact hinges on GAO’s findings and any subsequent congressional or regulatory actions that may follow.
While the emphasis on risk assessment and regulatory responses could improve transparency and inform policy, there is a risk that new data or recommended actions could precipitate rate pressures or changes in coverage availability if policymakers push to address identified gaps. The scope relies on interagency and state cooperation, which can vary in implementation pace and data quality.
These factors will shape how the study’s conclusions translate into practical policy changes.
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