How a California Condo Association Built Wildfire Resilience with Parametric Insurance

Full Case Study

Key Challenges for the Region

High Exposure: A high concentration of Homeowners Associations (HOAs) in wildfire-exposed areas increases overall risk and makes it harder to find adequate insurance.

Escalating Costs: Rate hikes exceeding 150% have become common in fire-prone regions, placing a growing financial burden on property owners seeking to maintain adequate coverage.

Market Retraction: Broad non-renewals are occurring as insurers continue to reduce their wildfire exposure, leaving many properties without viable insurance options and increasing coverage gaps.

california wildfire

Key benefits of parametric insurance

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Added Transparency

With pre-agreed parameters and payout structures eliminating ambiguity

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Bespoke Policies

Custom covers for one or multiple locations adapted to the client’s existing coverage (e.g., traditional insurance, captive)

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Swift Payouts

In a matter of days or weeks after a loss event, no longer requiring on-site loss assessment

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Financial Freedom

Covering any type of direct or indirect financial losses resulting from the event

Quick to spread and difficult to control, wildfires pose a serious threat to businesses in California. As traditional insurance becomes more restrictive, securing adequate capacity is critical for maintaining resilience in high-risk areas.

Descartes’ Parametric Wildfire Insurance: Simple, Transparent Protection for Those at Risk

Descartes’ Fire-in-a-Circle parametric solution uses satellite imagery to detect burned areas within a predefined radius. If wildfire damage is detected within that area, the policy is automatically triggered—offering swift payouts. This product provides a clear, affordable alternative to traditional insurance amid rising rates and shrinking capacity.

parametric wildfire insurance

case study example

Parametric Fire-in-a-Circle Solution for California

The rising intensity of wildfires in the U.S. add additional pressure on the prices and capacities of corporate insurance programs, creating many difficulties for Homeowners Associations.

Problem

After the 2025 Palisades Wildfire, a condo association in California realized that their traditional coverage did not provide adequate capacity and sought out an affordable, alternative solution for wildfire coverage. Their goal was to avoid the need for further fundraising from the HOA and to satisfy the lender’s requirement for wildfire coverage.

Solution

Descartes’ Fire-in-a-Circle solution can encompass the condo association’s large coverage area with no excluded areas or deductible, meeting their needs and budget.

Result

If they chose to cover a 100-meter area around the property assets with a location limit of $5 million, and a wildfire breached the 100-meter perimeter, they would be entitled to a full payout upon completion of a declaration of loss statement.

payout structure wildfire insurance

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