Calling rising wildfire-driven insurance costs an urgent problem, a new report from Headwaters Economics and the Columbia Climate School lays out options to ease the growing financial strain on Montana property owners.
Property insurance rates are climbing nationwide, but the pace accelerates in regions exposed to climate-related perils. That pattern was flagged earlier this year by the U.S. Treasury Department, which also found higher policy non-renewal rates in areas facing the greatest expected climate losses.
Coverage isn’t just getting pricier. It’s getting harder to keep.
The Montana-focused analysis examines five possible strategies to help high-risk communities access insurance. The list ranges from community risk pooling to agricultural-style risk models and broader state-level reform, Beinsure says.
Montana Insurance Commissioner James Brown said the state could see the fifth-largest increase in property insurance premiums this year, citing data from the National Association of Realtors. The numbers already tell a story.
Montana policyholders paid just over $4 bn in property premiums in 2013. By 2022, that figure had climbed to nearly $7.4 bn, according to the National Association of Insurance Commissioners.
Brown pointed directly to fire risk in a May letter. Nearly 70% of all wildfires recorded in Montana have occurred since 2000. Fires last longer, burn hotter, and destroy more.
At the same time, population growth and rising home values inflate replacement costs. Premiums follow. Brown estimated that about half of all properties in the state now face catastrophic wildfire risk.
This year alone, roughly 75,000 acres burned in Montana, with at least one primary residence lost, according to the Montana Department of Natural Resources and Conservation. Large-loss fires that destroy clusters of structures, once rare, are becoming more common.
Recent examples near Los Angeles, such as the Eaton and Palisades fires, underscore how quickly losses can spiral.
At the national level, wildfire costs are staggering. A 2023 report from the U.S. Department of the Interior estimated the annual economic burden of wildfires at $71 bn to $348 bn in 2016 dollars, or $87 bn to $424 bn in 2022 dollars.
Even that range understates reality, the report said, citing major data gaps around property damage, loss of life, and health impacts.
Suppression and mitigation spending runs into the tens of millions annually in Montana and regularly tops $1bn nationwide. Yet even heavy spending doesn’t guarantee recovery when a major fire hits.
“As the protection gap expands between those with insured losses and those without, a community’s ability to financially rebound is weakened,” the Headwaters report warns.
Municipal revenue, including property taxes, can shrink, and federal aid often fills the gap. That model strains quickly.
The authors argue that no single fix will work. They call for a layered, adaptive, and equity-focused approach.
