Catastrophe risk modeller CoreLogic has estimated that residential and commercial insurance industry losses for the ongoing Eaton and Palisades Fires in Los Angeles, California, will fall between $35 billion and $45 billion.
With the fires in Eaton and Palisades still burning as of Thursday afternoon, CoreLogic’s estimated insured loss range is preliminary.
The risk modeller confirms that it will provide a final insured loss estimate for the wildfires once the blazes have been fully contained, which is proving a challenge in very dry and windy conditions.
An update earlier today from the California Department of Foresty and Fire Protection, revealed that the Palisades Fire now covers more than 23,000 acres and is just 22% contained. The Eaton Fire is 55% contained and covers more than 14,000 acres, while the smaller Auto Fire is now 85% contained, and the Hurst Fire 98% contained.
It’s worth noting that CoreLogic’s estimate is just for residential and commercial insured losses for the Eaton and Palisades events, so doesn’t include any damages from the other, smaller fires that have occurred since the outbreak on January 7th, 2025, although the large majority of the loss is expected to come from the Eaton and Palisades outbreaks.
CoreLogic explains that its analysis of insured damage for both residential and commercial properties accounts for both fire and smoke damage as well as demand surge, debris removal, clean up and Additional Living Expenses (ALE).
The risk modeller explains that most of the losses are to residential properties, noting that many of the potentially impacted properties are high value homes, so even moderate damage from the fires or smoke could result in costly claims for insurers.
The $35 billion to $45 billion range does include losses to the California FAIR Plan, which are expected to be significant given the extent of the damage and recent exposure growth at the Plan.
“The destruction caused by these fires is anticipated to be the most expensive in the state’s history with effects on the insurance industry that will persist into the future. This event highlights the paramount challenge for homeowners and the insurers that support them – the increasing density of homes and properties near the wildlife-urban-interface,” said Tom Larsen, Senior Director of CoreLogic Insurance Solutions.
“Los Angeles is a resilient community, and as they look to rebuild it will be essential to design or redesign with mitigation practices in mind, so an event of this magnitude never happens again,” added Larsen.
As noted by Larsen, these fires in Southern California look certain to drive record insured wildfire losses for the state, and actually for the U.S., coming in significantly higher than the $10 billion ($13 billion in 2024 USD) from the Camp Fire in 2018.
Below, from reinsurance broker Gallagher Re, is a list of the costliest U.S. insured wildfire losses.
CoreLogic is the first of the risk modellers to provide an initial insured loss estimate, with other estimates so far coming from analysts, which range between $15 billion and $40 billion.
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