Record-Breaking Losses
Private forecaster AccuWeather predicts total losses from the wildfires to range between $135 billion and $150 billion. Analysts suggest insured losses alone could exceed $8 billion, making this one of the costliest wildfire disasters in modern US history.
More than 10,000 structures have been destroyed by the Palisades and Eaton fires combined, with the full extent of the devastation still unfolding.
Comparison to Past Wildfires
The 2018 Camp Fire in northern California, which caused $12.5 billion in insured losses, currently holds the record for the costliest wildfire in US history. The Los Angeles wildfires are expected to rival this figure due to the region’s high-value properties.
According to insurance giant Aon, the ongoing disaster will likely rank among the top five costliest wildfires in US history, with uninsured properties further inflating the total losses.
Impact on Insurance Markets
The wildfires are exacerbating an already strained insurance market in the US. As natural disasters become more frequent and severe, insurers have been raising premiums or canceling policies altogether.
In California, the state-run Fair Plan, which offers insurance for high-risk areas, has seen a significant surge in demand. Policies under the program have more than doubled since 2020, reaching over 450,000 by September 2024.
Denise Rappmund, a senior analyst at Moody’s Ratings, warns that the fires will have “widespread, negative impacts” on the state’s insurance market. Homeowners may face higher premiums and reduced property insurance availability.
Long-Term Consequences
Beyond immediate losses, the wildfires may have long-term repercussions on public health, tourism, property values, and state finances.
Jonathan Porter, Chief Meteorologist at AccuWeather, notes that recovery efforts will face challenges, with increased costs potentially driving up premiums and limiting insurance options for residents.
