Catastrophe modeler KCC said insured loss from privately insured and California FAIR plan policies to residential, commercial and industrial properties, and autos from the Palisades and Eaton Fires will be close to $28 billion.
That’s in line with estimates issued by Verisk earlier this week that peg insured losses to property from the Palisades and Eaton fires between $28 billion and $35 billion, which includes losses to the California FAIR Plan.
Both estimates are approaching some of the highest figures issued on insured losses so far, including a high of $40 billion put out last week from Keefe Bruyette & Woods analysts. Moody’s RMS Event Response estimated insured losses from wildfires will range from $20 billion to $30 billion. CoreLogic indicated a $35 to $45 billion range of insured losses for two major fires in Los Angeles.
Related: Wildfire-Risk Models Are Struggling to Predict LA-Style Fires
At one point the L.A. area had five significant ongoing wildfires. Total losses from the fires are expected to be massive. AccuWeather revised its preliminary estimate of the total damage and economic loss from the fires to between $250 billion and $275 billion.
The fires are also expected to put a strain on the FAIR Plan. FAIR Plan doesn’t have enough surplus for this level of loss, Gerald Glombicki, senior director at Fitch Ratings, said in an interview with Insurance Journal.
KCC’s estimated losses include damage from the fires, as well as smoke, time-element losses for residents in evacuation zones whose homes were not damaged by the fire, guaranteed replacement cost coverage and demand surge.
“A primary area of uncertainty in the loss estimates is the proportion of homeowners and business owners in impacted areas who are insured,” KCC wrote in an report on the fires. “KCC has assumed that the majority of properties in the area are insured either privately or through the FAIR plan, but the $28 billion estimate contemplates a small percentage that are likely uninsured.”
Containment on the fires continues to grow. The Palisades Fire has burned 23,448 acres and is 68% contained. The Eaton Fire has burned 14,021 acres and is 91% contained, according to CalFire.
Two new wildfires have broken out in Southern California are spreading quickly, forcing evacuations. The Hughes Fire, which began Wednesday and grew within hours to engulf more than 10,000 acres, is burning north of Los Angeles, authorities said. The Sepulveda Fire started early Thursday west of the city near the Getty Center art museum and has burned 40 acres.
Top photo: Palisades Fire in Los Angeles, California. January 2024. Source CalFire.
Topics
Catastrophe
Natural Disasters
Profit Loss
Wildfire
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