A recent report from the Canadian Carbon Removal Project developers, Deep Sky, reveals a growing home insurance crisis in North America driven by unprecedented wildfire risks in 2025.
Combining insurance data from California, Oregon, Texas, and Washington, Deep Sky’s Wilfires 2025 reports find that a widening gap exists between increasing wildfire threats and shrinking insurance coverage.
The study finds over 150,000 households in California’s most fire-prone areas are uninsured as insurers back away from high-risk regions. Building on their 2024 findings of a 20-fold increase in extreme fire risk frequency, the new research highlights the growing financial and human toll of climate-driven wildfires.
Using sophisticated catastrophe models, insurers are withdrawing from vulnerable markets, particularly in California, where losses from recent fires, like January’s Los Angeles event, are estimated at $44.5 billion.
“When insurers can no longer price risk effectively, they exit the market entirely,” said Max Dugan-Knight, Deep Sky’s Climate Data Scientist.
With private insurers pulling back, government-backed programs like California’s FAIR plan have become last-resort insurers. However, these programs face financial strain as more homeowners rely on them, with FAIR plans in California, Texas, and Oregon growing by 121%, 54%, and 39%, since 2020.
Additionally, Deep Sky’s Fire Weather Index shows spring 2025 conditions are at levels unseen in over a decade across much of North America. Early wildfires in Canada have forced evacuations and states of emergency, while Alberta and British Columbia face even higher risks as peak season approaches.
The report warns of a “vicious cycle” where worsening fire conditions lead to larger wildfires, releasing more carbon emissions that fuel climate change and further increase fire risk. Since 2019, one in five homes in California’s highest-risk areas have lost coverage, and premiums have surged 42% since 2009. Over 30,000 policies have been non-renewed since 2018.
Deep Sky’s full Wildfires 2025 report, including detailed risk maps, is available at deepskyclimate.com/research. The findings call for urgent coordinated action from insurers, governments, and homeowners to manage wildfire risks and stabilize insurance markets.
