With the availability of new data and risk models, the potential exists to make a much more informed and scientific assessment based on data points that are more highly correlated with fire damage to a property and thus more accurately predictive of potential loss. (Credit: metamorworks/Adobe Stock)
Fire-related events represent a significant portion of an insurer's claims, upwards of 24% of expenses according to the Insurance Information Institute.
According to the National Fire Protection Association (NFPA), there were approximately 1.3 million residential fires resulting in an estimated $14.8 billion in losses in the U.S. For commercial properties, the percentage of claims that are fire-related is typically lower than for residential properties, but the damages are still significant and result in higher claims, as well as added business interruption losses. According to the NFPA, there were approximately 99,000 commercial structure fires resulting in $2.6 billion in property damages.
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