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A staggering $2.15 trillion worth of U.S. residential property is at high risk of wildfire damage, according to a new AI-powered analysis from ZestyAI, the leader in climate and property risk analytics. The study, which assessed 126 million properties nationwide, found that 4.3 million individual homes face heightened wildfire risk—far beyond traditionally recognized high-risk areas.

Using advanced AI models trained on over 2,000 historical wildfires, ZestyAI mapped wildfire exposure at the property level, integrating satellite and aerial imagery, topography, and structure-specific characteristics. While California leads the nation with $1.16 trillion in wildfire-exposed property, other states such as Colorado ($190.5 billion), Utah ($100.3 billion), and North Carolina ($71.2 billion) also face significant risk.

Wildfire Risk is a Nationwide Challenge

While the Western U.S. has historically seen the most severe wildfire activity, ZestyAI’s findings confirm that high-risk properties exist across the country. States like North Carolina (4.6% of homes at high risk), Kentucky (2.9%), Tennessee (2.3%), and even South Dakota (11.0%) are now seeing increased wildfire exposure.

As more homes and businesses are built in fire-prone landscapes, the Wildland-Urban Interface (WUI) continues to expand. This, combined with intensifying climate conditions, is driving higher insurance costs and growing availability concerns. Today, one in eight U.S. homeowners already lacks adequate insurance coverage, and that number is expected to rise.

AI Expands Insurance Access in High-Risk Areas

Attila Toth, Founder and CEO of ZestyAI said:

"Wildfires are threatening more properties than ever before, with billions of dollars in exposure even in areas many people don’t associate with fire risk. Yet, too many homeowners are finding themselves uninsured or underinsured just as these disasters become more frequent and severe. Insurers have traditionally relied on broad, regional models that don’t account for individual property characteristics."

"That means some homeowners are denied coverage even when their true risk is much lower than their neighbors'.’"

AI-driven risk analytics are reshaping the way insurers assess wildfire exposure. By providing granular, property-specific insights, we’re helping insurers make smarter underwriting decisions—keeping coverage available in high-risk areas while ensuring that homeowners who take mitigation steps are recognized.

Last year, our models helped insurers extend coverage to 511,000 properties that had previously struggled to secure insurance due to outdated risk models. In 2025, we expect that number to reach a million, ensuring that even in high-risk areas, responsible homeowners have access to protection when disaster strikes.

Property and climate risk analytics leader ZestyAI today announced regulatory approval of its Severe Convective Storm Suite in Oklahoma, North Carolina, Louisiana, Wisconsin, and Arkansas—covering more than 12 million residential and commercial properties. 

Severe convective storms caused $58 billion in insured losses in 2024, marking the second-costliest year on record. A recent ZestyAI analysis revealed that in these five newly approved states, more than 2.1 million properties face a high risk of filing a hail claim—putting over $31 billion in potential roof replacement costs on the line. 

Unlike traditional models, ZestyAI’s AI-driven risk models predict the likelihood and severity of claims at the individual property level by analyzing the interaction of local climatology with property-specific characteristics.

Built, tested, and validated on an extensive claims database, the models provide a granular, transparent understanding of risk—delivering the top risk factors for each property, and equipping insurers with the accuracy needed to improve underwriting, optimize pricing, and reduce preventable losses.

“Severe convective storms now cost insurers more than hurricanes, yet traditional underwriting tools don’t provide the precision needed to keep pace with rising losses,” said Bryan Rehor, Director of Regulatory Affairs at ZestyAI.

“These approvals reinforce the insurance industry’s shift toward data-driven, property-level risk assessment."

ZestyAI’s SCS models have now been thoroughly vetted and approved by regulators across 14 states—covering more than 44 million properties across the Midwest, Great Plains, and South.

ZestyAI announced today that Lemonade, the digital insurance company powered by AI and social impact, has adopted the ZestyAI platform to further optimize underwriting for key catastrophe perils in the U.S., building on the company’s existing technology and underwriting operations.

ZestyAI’s predictive analytics platform leverages advanced AI models to analyze the interplay of climatology, geography, and the unique characteristics of each structure and roof, enabling precise and transparent property risk assessments.

By leveraging unique risk insights, Lemonade can make smarter catastrophe risk mitigation decisions. Additionally, ZestyAI’s proactive regulatory approach, with approvals in key states, simplifies compliance and enables Lemonade to implement these models faster.

“Since our launch, we've always been committed to using technology to create smarter, more accessible insurance products,” said Ori Hanani, Senior Vice President of Insurance at Lemonade.

“In leveraging ZestyAI’s advanced risk models, we're able to further support homeowners in securing comprehensive coverage for their most valuable assets, while also continuing to strengthen our underwriting capabilities as we continue to grow." 

Attila Toth, Founder and CEO of ZestyAI, said:

Lemonade is a natural partner for ZestyAI.

“Their innovative approach to insurance and customer-centricity aligns perfectly with our commitment to provide actionable insights that drive smarter risk decisions.”

This partnership reflects a shared vision for addressing increasing climate risks and sets a new standard for resilience, efficiency, and innovation in the insurance industry. 

ZestyAI today announced a partnership with the Colorado FAIR Plan to expand insurance access for homeowners facing coverage challenges.

The partnership leverages ZestyAI’s AI-driven risk models—Z-FIRE™, Z-HAIL™, and Z-WIND™—to deliver property-specific risk assessments for wildfire, hail, and wind. These insights will support risk-based pricing and help the Colorado FAIR Plan guide homeowners on mitigation strategies.

“Our mission is to ensure every Coloradan has access to insurance that reflects their property’s actual risk, not outdated assumptions,” said Kelly Campbell, Executive Director of the Colorado FAIR Plan.

“ZestyAI’s models will help us bring greater fairness and resilience to the market while equipping homeowners with practical mitigation guidance.”

Over the next year, Colorado FAIR Plan expects to provide coverage to nearly 30,000 families previously classified as high-risk under traditional models.

By incorporating granular risk data, the plan can better align premiums with actual risk while offering homeowners actionable steps to protect their properties.

Those who invest in mitigation may also transition back to the standard insurance market over time.

Colorado regulators have prioritized risk-based pricing and transparency to stabilize the insurance market. Colorado Insurance Commissioner Michael Conway has led efforts to integrate mitigation into coverage decisions, aligning with the FAIR Plan’s adoption of ZestyAI’s AI-driven insights.

“This partnership ensures risk assessments reflect real property conditions—not just broad classifications—so homeowners can access both coverage and meaningful mitigation guidance,” said Bryan Rehor, Director of Regulatory Affairs at ZestyAI.

“Through AI-powered insights, we’re helping homeowners secure risk-aligned coverage options.”

ZestyAI’s risk platform integrates aerial imagery, historical building permits, geospatial data, and structural attributes to provide precise, property-level risk insights.

Insurers using ZestyAI’s models can assess key risk factors—including vegetation proximity, roof condition, and building materials—to inform underwriting, pricing, and mitigation recommendations to policyholders.

The collaboration builds on ZestyAI’s success with the California FAIR Plan, which expanded coverage for hundreds of thousands of homeowners in 2024.