<p>The prevention of wildfires necessitates collaboration between private and public entities, including government agencies, insurance companies, and landowners. To address this, we present a wildfire risk assessment model that combines government subsidies and landowners’ actions to mitigate wildfires in areas of varying risk levels. Our study focuses on integrating a fire behavior model into a model that minimizes expected social costs while considering the conditions for the initiation and spread of large wildfires. We determine the probability of wildfire risk by accounting for non-stationary weather dynamics resulting from climate change and surface fire intensity. Additionally, we calculate a fair premium for wildfire risks in each region, a critical concern for insurance companies. To achieve this, we develop an optimization model that calculates the optimal insurance premium based on landowners’ willingness to pay. The model determines the ideal government subsidies that cover a proportionate share of fire insurance costs, aiming to achieve a social optimum. By employing this approach, insurance companies can not only assess the risk but also determine its pricing based on landowners’ efforts. Furthermore, we design a fuel treatment strategy by examining the relative influence of weather components and fuel variables on surface fire intensity. We evaluate the proposed model through a case study conducted in Sonoma County, California.</p>