The fire season of 2000 is one of the most severe on record, burning approximately seven million acres by the end of September—over 2.5 times the 10-year average of 2.6 million acres. Fires burning in the wildland-urban interface have resulted in millions of dollars of private property damage. Although federal fire policy states clearly that federal agencies are not responsible for fire protection in such areas, significant resources have been allocated to protecting private structures. We examine the effects of federal protection for private property in terms of the Coase Theorem and explore the effects of private and federal insurance, homeowner incentives, and opportunity costs in terms of public resource value. We conclude with suggestions for future investigation into property rights regarding wildfire prevention and protection in the wildland-urban interface.