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UN Wildfire Risks Report Adds to Scrutiny of Insurance’s Role


Wildfires present a significant risk to homeowners, according to a report from the United Nations that paints a large picture of that risk, but legal observers said there are lots of policymaking discussions left on how to handle environmental and economic issues affecting the insurance industry.


Terrifying Report On Wildfire Risk

Any time there is a report about an increase in fire risk, legal experts say the report goes to the heart of a traditional insurance policy for covering property. Every time that there are predictions of more, hotter and bigger fires that will hit more populated areas, experts say insurance is inevitably affected.

Jared Zola, a partner in Blank Rome LLP's policyholder-only insurance recovery practice, said the UN report is "terrifying" from an environmental and human perspective. This report should serve as a warning for anyone who wasn't already aware of these "grave dangers," he said.

The U.S. has seen its share of devastating wildfires. Two of the most destructive fires on record in California were in 2017 and then 2018 that burned through several towns resulting in numerous deaths. In December, Colorado homeowners saw the impact fire risk has on its communities. Colorado's legislature is debating policy changes to address difficulties faced by policyholders.

Zola's attention, as an insurance recovery lawyer, was on the UN report's emphasis on health impacts of fire exposure. First and third-party property damage insurance claims by businesses and homeowners arising from wildfires "seem apparent" from that discussion in the report, according to him.

"But, if a large group of individuals claim bodily injuries against one or several businesses that are alleged to have caused a large-scale fire, the insurance coverage disputes would be wild," he said.

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“UN Wildfire Risks Report Adds to Scrutiny of Insurance’s Role,” by Shawn Rice was published in Law360 on March 2, 2022.