Willis and The Nature Conservancy (TNC) have teamed up to develop an innovative insurance policy that factors in forest fire mitigation efforts, resulting in dramatically lower coverage costs for a California homeowners association, and potentially offering a solution for other wildfire-prone regions.
The partnership resulted in a $2.5 million wildfire resilience policy with 39% lower premiums and 89% lower deductibles than standard coverage for the Tahoe Donner Association, a ski area and private homeowners association in Truckee, California.
The groundbreaking policy, structured by Willis and placed with Globe Underwriting, a London market underwriting agency, represents a significant shift in how insurers evaluate wildfire risk. Unlike traditional policies that haven’t historically accounted for forest treatment efforts, this new approach explicitly recognizes and rewards nature-based forest management practices.
Tahoe Donner has completed forest management projects across 1,520 acres since 2015. These projects include strategic tree thinning to improve forest health and planned fires to clear flammable vegetation—both scientifically proven to reduce wildfire risk.
“The forest management work completed by Tahoe Donner, by removing fuel that could burn and leading to a lower fire risk, has considerably reduced the premium and deductible in this insurance policy,” said David Williams, associate director of Alternative Risk Transfer Solutions at Willis.
The policy covers 1,345 acres of Tahoe Donner’s forested and recreation land. Globe Underwriting provided the empirical analysis supporting the substantial premium and deductible reductions, leveraging its expertise in forestry risk assessment and profiling.
Annie Rosenfeld, Tahoe Donner General Manager, highlighted the practical effectiveness of their forest management approach: “Tahoe Donner has been tested with fires that have come to the borders of the community, and the forestry work did its job. It slowed the spread of the fire to give firefighters enough time to stop it from impacting our community.”
Creating a Blueprint for Sustainable Insurance
The development of this policy represents a collaborative effort across multiple sectors. The Center for Law, Energy and the Environment (CLEE) at the University of California, Berkeley, worked alongside Willis and TNC to demonstrate how ecological forest practices could translate into tangible insurance benefits.
“Federal, state and local governments, homeowners, homeowners’ associations and businesses are doing the right thing to reduce wildfire risk and invest in nature-based forest management,” said Dave Jones, Director of the Climate Risk Initiative at CLEE and former California Insurance Commissioner. “The improved price and availability of this pioneering insurance policy demonstrate that home and business insurers can and should renew and write property insurance in California and elsewhere in the United States where forest treatment is undertaken.”
The initiative aims to create momentum for similar approaches across the industry. Kristen Wilson, Lead Forest Scientist at TNC in California, noted: “By placing this innovative insurance product, we hope to inspire other insurance underwriters to account for the benefit of thinning and prescribed fire and increase the implementation of this type of work more broadly.”
This policy could serve as a template for a more resilient insurance model that acknowledges and incentivizes risk reduction efforts.
View the press release about the policy here.