Los Angeles Wildfires Cause Record-Breaking Insurance Losses
According to the disaster risk modeling company Karen Clark & Company (KCC), the wildfires in Los Angeles have led to insurance losses of approximately $28 billion, making it the most devastating wildfire in U.S. history.
Since the outbreak of the fire on January 7, the fire has affected an area almost equivalent to the size of Washington D.C., resulting in 28 fatalities and damage or destruction to nearly 16,000 buildings, as reported by the California Fire Department.
It is expected that insurance companies in the United States and Europe will face billions of dollars in wildfire-related claims.
In their report, KCC stated that the projected losses include damages caused by the fire, smoke-related losses, time losses incurred by residents in evacuation zones even if their homes were not damaged by the fire, insurance costs for reconstruction, and losses due to increased demand.
The report added that these losses should be covered by regular insurance policies.
In recent years, several wildfires and other natural disasters have led to continuous increases in catastrophic claims, causing significant setbacks for insurance companies.
The Palisades Fire destroyed nearly 24,000 acres of land in the Santa Monica Mountains, Pacific Palisades, and Eastern Malibu. The Eaton Fire burned over 14,000 acres of land in the Angeles National Forest, Altadena, and Sierra Madre.
On Wednesday, consulting firm Verisk also estimated fire-related losses to be between $28 billion and $35 billion.
(This article references a report from Reuters)