Some of the priciest properties in the U.S. have been destroyed by the raging wildfires. The LA wildfire are projected to become among the most expensive disasters in U.S. history, with losses expected to surpass $135 billion (£109.7 billion).
AccuWeather’s preliminary estimate forecasts losses between $135 billion and $150 billion as fires devastate areas with high-value properties. These wildfires could soon rank among the costliest natural disasters in the country.
Widespread Damage and Insurance Impacts
More than 5,300 structures have been destroyed by the Palisades blaze, while the Eaton Fire has claimed over 5,000 structures. With fires still burning, the extent of destruction continues to grow. Analysts from Morningstar and JP Morgan predict insured losses will exceed $8 billion, putting the insurance industry under severe pressure.
AccuWeather’s Chief Meteorologist Jonathan Porter described the fires as “one of the costliest wildfire disasters in modern U.S. history.” The 2018 Camp Fire, which destroyed the town of Paradise, remains the most expensive wildfire in insured losses, totaling $12.5 billion, according to insurance firm Aon. Given the high property values in Los Angeles, the current fires are likely to rank among the top five costliest wildfires, with total losses including uninsured properties expected to climb even higher.
The fires may also lead to long-term impacts on health and tourism, complicating recovery efforts. The insurance market, already in turmoil, faces added challenges as companies increase premiums or drop coverage altogether. This has pushed more homeowners toward state-backed insurance plans, which are often pricier and offer less protection.
Strain on California’s Insurance Market and Property Values
California’s FAIR Plan, a last-resort insurance option, has seen its policies more than double since 2020, rising from 200,000 to over 450,000 by September of last year. Areas hit hardest by the fires report the highest reliance on these plans, raising concerns about the program’s financial stability.
Moody’s analyst Denise Rappmund warned of widespread consequences for California’s insurance market. “Recovery costs will likely push premiums higher and reduce insurance availability,” she said. The state also faces risks of long-term property value declines and increased pressure on public finances.
The aftermath of these fires highlights the growing challenges posed by natural disasters, as rising recovery costs strain resources and leave many without adequate coverage.