The summer of 2013 has been another severe fire season for theUnited States, a trend that has insurance companies bracing for anew normal: higher rates of property damage as Americans move towildfire-prone areas in ever greater numbers.

The deaths of 19 firefighters in Arizona's Yarnell Hill fire inJune, the biggest such loss since 1933, shocked the nation and wasthe most visible evidence to date of a general trend of risingthreats to lives as well as property.

The insurance industry has seen a dramatic upward trend infire-related property losses in recent decades, according to datafrom the Insurance Information Institute.

Wildfires in the United States accounted for $13.7 billion intotal economic losses and $7.9 billion in insured losses from 2002through 2011. That is a spike from the prior decade, which saw $6.8billion in economic losses and $1.7 billion in insured losses.

Federal government spending has also sharply risen asfirefighters must dedicate more time to wildfire suppression.

Numerous factors are involved, including longer fire seasonstied by some to climate change, logging and diminished fireprevention funds that have allowed the build-up of flammable fuel,turning some communities into fire-season tinderboxes.

The biggest culprit though, according to many experts, is therapid increase in development in areas where wilderness meets humandevelopment.

As the population has increased, so has the appeal of living inareas away from cities.

"It's definitely something we've been seeing more and more inrecent years as cities get congested," said Nicole Farr, aspokeswoman for the Arizona Insurance Council, a group thatrepresents the state's insurance industry.

Between 2000 and 2010, 10 million new homes were built inwildland-urban interface (WUI) areas in which residences eitherborder or are built on land prone to wildfires.

Those homes in WUI areas accounted for two-thirds of all homesbuilt in the United States during that time, according to researchjointly conducted by the U.S. Forest Service, University ofWisconsin and Oregon State University.

Nationwide, more than 47 million homes, or 36 percent, reside inthe WUI, which is 10 percent of the country's area, the researchshowed.

Some insurance companies are striking back with stricter rulesfor obtaining homeowner's insurance, which often includes wildfiredamage, for those living in high-risk areas.

"More and more, these communities that are in these fire-proneareas are growing," Farr said. "That is creating these more costlywildfires because people are living in these areas."

The most common goal of the new rules is to incentivize orrequire homeowners to create "defensible spaces," an area aroundthe house cleared of debris and overhanging branches that couldcontribute to fire spreading to a house.

State Farm, the largest home insurer in the country, has startedreassessing high-risk properties in specific western states as theycome up for policy renewal and making recommendations fordefensible spaces. In some cases, according to the company, fewerthan 1 percent of people decline to modify their property anddiscontinue their insurance policy.

"Most people take great pride in their property," said StateFarm spokeswoman Angela Thorpe. "They're interested in mitigatingtheir fire risk."

Farr said the Arizona insurance industry has always beenconscious of wildfire risk. She could not say how policies may havechanged recently but areas deemed to be higher risk were likely tosee higher rates.

Carole Walker, executive director of the Rocky MountainInsurance Information Association, said people in some areas ofColorado might be left high and dry.

"If people are moving into a class-10 (high-risk area)...they're basically in no man's land," Walker said. "It may bedifficult for you to find insurance."

PRESSURE TO PROTECT PROPERTY

The development of wildfire-prone areas is also driving upgovernment spending on fire containment, according to a paper fromHeadwaters Economics, a Bozeman, Montana, research group thatfocuses on land management decisions in the western UnitedStates.

The research, published in June, highlighted a 1995 policychange by the U.S. Departments of Agriculture and the Interior thatmade protecting private property and natural resources equal inpriority after the protection of human life.

"The political reality is that protecting people's homes isgiven priority over protecting lands and resources ... (and)structures adjacent to federal lands can significantly alter firecontrol strategies and raise costs," the group said.

In the 1990s, average federal spending on wildfire suppressionwas less than $1 billion per year, according toHeadwatersEconomics. That has ballooned to more than $3 billion since 2002and does not account for state spending, estimated at another $1billion to $2 billion a year.

Chris Mehl, a policy director with Headwaters Economics, saidreforming the 1995 policy on private property could be one way toreduce WUI growth, by conveying to property owners that onceresidents in the path of a wildfire are evacuated, their propertymight not be protected.

Questions remain for insurance agencies about the best way toreform wildfire coverage. So far, losses to wildfires have been fareclipsed by losses from other natural disasters, but that's a coldcomfort for companies that see increases in risk.

Mehl said insurers are currently grappling with the question ofwhether damages from wildfires could eventually rival those ofother natural disasters, and how effectively they can mitigatepotential losses.

"They've made some big strides, but it remains to be seen howconsistently they can apply these policies," he said.