California wildfire insured losses at up to $3bn
Insured losses from the Tubbs, Pocket, Nuns, Atlas, Redwood, and Sulphur fires in California will be between $2 billion and $3 billion, according to estimates by catastrophe modelling firm AIR Worldwide.
The loss estimates capture residential, mobile home, commercial, and automobile losses, as well as direct business interruption losses.
Multiple wildfires exacerbated by hot, dry, and windy conditions spread across eight counties of California starting in early October. Twenty-two active wildfires were reported by CAL FIRE on October 12, consuming more than 170,000 acres and destroying more than 3,500 structures.
As of Wednesday, Oct. 25, nine wildfires were still burning in California, including the Vista Fire near Casitas Springs that erupted on Tuesday, Oct. 24. In total, more than 245,000 acres have burned, an estimated 8,700 structures have been destroyed. Thousands of acres have burned in Yuba, Sonoma, Napa, Lake, Mendocino, Butte, Nevada, and Solano counties, which were heavily impacted by the fires.
Analysis from AIR shows that losses will be dominated by residential losses, with several neighbourhoods—most notably, in Sonoma County—experiencing catastrophic loss. These estimates of insured losses are based on the assumption of nearly 100 percent take-up rates. The fact that damage from fire, including wildfire, is included in standard homeowners’ policies in California informs that assumption. The range in AIR’s loss estimates reflects uncertainty in the payment of additional living expenses resulting from mandatory evacuation of the city’s population, loss of some individual structures outside of the most affected neighbourhoods, as well as widespread but lower levels of loss due to smoke, loss of electricity, and damage from suppression efforts.
AIR’s modelled insured loss estimates do not include losses to uninsured properties, losses to land, losses to infrastructure, losses to vineyard grapes and vines, and demand surge.
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