Wildfires that have burned more than 900 sq km in Spain and roughly 1,160 sq km in France during July have pushed both countries into record or near-record territory, according to a new report from broker Guy Carpenter.
The broker said loss estimates remain in progress as fires continue burning, but outlined how national coverage schemes, private insurers and reinsurance treaties are likely to split the resulting claims. The report's coverage-split detail is worth acting on directly: it demonstrates, in real time, exactly how a business can be evacuated and lose revenue without ever qualifying for business interruption cover.
Guy Carpenter said most burnt area has been in rural regions with limited property insurance penetration, though hundreds of thousands of people have been evacuated as a precaution. Property damage could become significant if fires reach urban areas such as Bordeaux or Madrid, the broker said. Crop and vineyard losses, smoke exposure, evacuation costs, business interruption and transport disruption are expected to be key loss drivers.
The largest single blaze, near Navaluenga in Ávila province, became the largest wildfire recorded in Spain's history after igniting July 22, the report said. A separate fire near San Martín de Valdeiglesias later merged with it, and the combined complex burned roughly half of Spain's full-year wildfire total within three days while displacing about 90,000 residents. In France, the Gironde wildfire forced the evacuation of 253,000 people and destroyed around 240 homes; a volunteer firefighter, Corporal Laurent Masson, died in the line of duty. Beyond structural damage, Moody's has noted that more than 13,000 businesses were evacuated in Gironde, including in the coastal resort of Lacanau, generating business-interruption losses with no physical damage, while Bordeaux wine producers have raised concerns about potential smoke effects on the 2026 vintage.
In Spain, the Consorcio de Compensación de Seguros does not cover wildfire property damage, leaving those losses to private insurers, Guy Carpenter said. Agroseguro, the agricultural co-insurance pool, has told farmers and livestock owners that wildfire losses are fully covered regardless of origin, and that claims need not be filed until authorities declare affected areas safe to access.
In France, home destruction is covered under the fire guarantee within standard home insurance policies rather than the CatNat natural catastrophe scheme. Business property damage is covered under standard fire cover, with business-interruption losses reimbursed only where that option was purchased and the fire caused property damage; optional extensions can cover losses tied to supplier failure, client failure or inability to access a site.
That last clause is the one worth underlining for any broker with clients holding French commercial property, or reinsurance professionals assessing exposure across affected treaties: the 13,000 evacuated Gironde businesses are a live illustration of exactly this gap. A business can lose weeks of trading to a mandatory evacuation and still have no valid BI claim under a standard policy if its own premises were never physically damaged. This is precisely the moment to review whether commercial clients in wildfire-adjacent zones, in France or elsewhere with similar policy structures, actually hold the optional extension needed to respond to an evacuation-only loss, rather than discovering the gap only after the next event forces the question.
Authorities have identified the person responsible for the Gironde fires, and Guy Carpenter said that individual's liability insurer could face a subrogation claim from property insurers. On reinsurance treaties, the broker said property damage and "forces of nature" covers typically include fire losses, with reinsurers generally following the fortunes of ceding insurers subject to policy terms and treaty exclusions. For claims and reinsurance teams, that subrogation possibility is worth tracking specifically as the incident progresses, since a successful claim against the identified individual's liability insurer could meaningfully offset losses currently sitting with property insurers and their reinsurance treaties.
Guy Carpenter noted 354,747 hectares burned in Spain in 2025, with 2026 also on pace to set a record. For scale, Insurance Europe has said the 400,000 hectares that burned in Spain last summer produced only around 900 claims, totaling €23 million, a gap between burnt area and insured cost worth watching as 2026 losses are tallied.
Morningstar DBRS has said the wildfires are more likely to register as an earnings event for insurers than a material credit issue, citing strong capital positions entering the 2026 season, though a fire reaching Bordeaux's suburbs or developed areas around Madrid could shift the event toward urban conflagration. Separately, wildfire risk remains excluded from the public-private natural disaster compensation frameworks in both Spain and France. Global cat bond issuance with wildfire exposure topped $5 billion in 2025, more than double the 2024 total.
