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WASHINGTON — Los Angeles-area wildfires are likely the worst in California history and are almost certain to rank among the costliest natural disasters in U.S. history, with economic damages in the tens of billions of dollars. go up to .
Preliminary estimates from weather forecasting service AccuWeather put the total damage and economic losses at $52 billion to $57 billion, and that number could rise if the fires continue to spread.
JPMorgan on Thursday doubled its forecast for economic losses from a day earlier, saying it would be closer to $50 billion.
Five fires have already burned thousands of acres in and around Los Angeles, forcing at least 130,000 people to evacuate and damaging or destroying about 2,000 buildings. Five people died.
It may take several days before the full extent of the damage is known, but given the sheer number of high-priced homes and businesses affected, the overall economic damage is estimated to have occurred across California in 2018. This suggests that the loss is likely to be greater than the $30 billion lost in the Camp Fire. It is considered the state’s deadliest wildfire to date.
By comparison, the 2023 Maui wildfires caused $5.6 billion in damage, according to the National Oceanic and Atmospheric Administration.
Hurricane Katrina in 2005 was the costliest natural disaster in the United States, with an estimated cost of $200 billion, according to NOAA estimates.
Moody’s experts on Thursday expected insured losses from the Los Angeles County fires to be in the billions of dollars, given the high real estate values in the coastal Pacific Palisades region, where the first fire broke out on Tuesday. He said that
Fires around Santa Monica and Malibu destroyed one of the most expensive homes in the country, with a median price of more than $2 million, according to AccuWeather.
JPMorgan on Thursday raised its initial estimate of insured losses to $20 billion.
However, many of the damaged homes were not insured. The insurance industry has been challenged in recent years by hurricanes and other precursors to climate change, and some major insurers have declined to write policies in high-risk coastal and wildfire areas like the Pacific Palisades. or has stopped updating.
In recent years, California has had one of the highest rates of non-renewal of homeowners insurance in the nation, according to a government report.
“The fires sweeping through Los Angeles County highlight the increasing risk that wildfires pose to critical areas of California,” said Dennis Rapmunt, senior analyst at Moody’s Ratings.
“It is too early to assess the potential impact on property valuations and other credit implications for individual municipalities,” she added. “However, these events will continue to have a broad negative impact on the state’s broader insurance market, with premiums likely to rise due to increased recovery costs and the availability of property and casualty insurance likely to decrease. There is.”
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