IBHS Expands Wildfire Prepared Program for Enhanced Insurance Coverage
The Insurance Institute for Business and Home Safety (IBHS) has expanded its Wildfire Prepared program to include standards for multifamily properties and neighborhoods, alongside updated criteria for single-family homes. This expansion aligns with the U.S. insurance industry’s efforts to combat increasing challenges related to wildfire insurance coverage.
The new standards aim to mitigate wildfire risks by addressing issues at both the building and community levels, focusing on home ignition and fire spread between structures. According to Steve Hawks, IBHS's senior director for wildfire, the program emphasizes a coordinated approach crucial in preventing fire spread within communities. He noted that decisions made at the individual home level have significant impacts on neighboring properties during a wildfire.
The program introduces the Wildfire Prepared Neighborhood designation, previously piloted with homebuilder KB Home in California. This designation, along with the new Wildfire Prepared Multifamily standard, applies mitigation criteria to duplexes, townhomes, apartments, and condominiums. These designations offer both Essential and Enhanced levels, reflecting the principles of the single-family home standard.
Revisions to the Wildfire Prepared Home standard are based on field research and homeowner input, providing clearer guidance on vegetation management and structural features like decks. Hawks emphasized that the program's evolution, grounded in research both in the field and at the IBHS Research Center, ensures achievable and effective actions that enhance home survivability and support sustainable insurance coverage.
The program's expansion coincides with significant pressures in the U.S. wildfire insurance market. The California FAIR Plan's enrollment surged by 43% between September 2024 and December 2025 due to private insurers' withdrawals following severe wildfires, leading to a $700 billion exposure. Insurers in California faced a $1 billion industry assessment related to losses from the Los Angeles wildfires alone.
The exodus of private insurers is notable, with over 100,000 homeowners losing coverage between 2019 and 2024. State Farm, the largest homeowners insurer in California, faced $7.6 billion in losses from the 2025 wildfires and received approval for increased rates while limiting new policy issuances in the state.
The Wildfire Prepared designation has become an invaluable underwriting tool. Carriers avoiding uncertified homes in high-risk areas may write policies for IBHS-certified properties, with some providing premium discounts up to 20% for certified homes. Mercury Insurance formalized a partnership in May 2025, enabling policyholders in wildfire-prone areas to receive rate discounts for achieving the Wildfire Prepared Home designation.
Regulatory reforms in California allow for advanced wildfire risk models in rate calculations, recognizing measures like defensible space. Colorado legislation effective January 2026 also requires insurers to consider structural hardening in pricing models and provide clear explanations of wildfire risk scores to homeowners. The expanded program now reaches 14 states, with approximately 4.8 million homes in high-risk wildfire areas eligible for these designations, extending coverage to all western states and Florida. This comprehensive approach enhances the applicability of the program, offering underwriters crucial tools for assessing both individual and community-level risks.