Private weather forecasting firm Accuweather estimates more than US$250 billion in damages and economic loss from the Greater Los Angeles wildfires, according to a statement published by the company, making the ongoing disaster the costliest in US history.
California Governor Gavin Newsom, when asked whether the conflagration would be among the nation’s worst disasters on NBC’s Meet the Press on Saturday, said that he believes “it will be in terms of just the costs associated with it, in terms of the scale and scope.” More than 40,000 acres – or around 16,200 hectares – have burned so far, destroying over 12,300 structures and killing at least 24 people. The fires are also still burning, with the Santa Ana winds – known as the “devil winds” for their dry heat and ferocious speed – expected to ratchet back up today, as firefighters continue their efforts to contain the two largest blazes: the Palisades Fire and the Eaton Fire.
Much of Southern California remains under red flag warnings, a signal from the National Weather Service that the area is at a severe risk of wildfire due to a combination of warm temperatures, low humidity and strong winds.
[See more: The catastrophic Los Angeles wildfires are fuelled by climate change, experts say]
The estimates from AccuWeather were revised up from US$200 billion to US$250-275 billion on Monday. Part of the reason is because of where the worst fires continue to burn, impacting an area from Santa Monica to Malibu, home to “some of the most expensive real estate in the country,” with median home values exceeding US$2 million.
If its estimates prove accurate, the Greater Los Angeles wildfires will cost the state more than the entire 2020 wildfire season, when more than 4.3 million acres burned. Worsening the economic impact is the lack of insurance. State Farm, the state’s largest insurer, refused nearly 70 percent of policy renewals in a zip code central to the area affected by the Palisades Fire and dropped nearly 4,000 policies across multiple LA zip codes, according to AccuWeather. Of the 2.8 million California homeowner policies that insurance companies declined to renew between 2020 and 2022, according to reporting by Euronews, over half a million were in Los Angeles County.
New analysis by JPMorgan, reported by Fox Business, echoes this dire picture. The banking giant put insured losses from the fires at over US$20 billion – for total damages first estimated at around US$50 billion, meaning less than half of those impacted are insured. “Moreover,” the JPMorgan analysis stated, “the fires have not been contained thus far and continue to spread, implying that estimates of potential economic and insured losses are likely to increase.”
