Posted on 01/09/2025 11:19:24 AM PST by E. Pluribus Unum
WASHINGTON — The destruction caused by the Los Angeles-area wildfires, possibly the worst ever in California, is almost certain to rank as one of the most costly natural disasters in U.S. history, with the total economic toll well into the tens of billions of dollars.
One preliminary estimate calculated by AccuWeather, the weather forecasting service, put the damage and total economic loss at $52 billion to $57 billion — a sum that could rise if the fires continue to spread.
J.P. Morgan on Thursday doubled its expectations of economic losses from a day earlier, saying they would be closer to $50 billion.
Five fires have already scorched thousands of acres in and around Los Angeles, forcing at least 130,000 people to be evacuated and damaging or destroying about 2,000 buildings. Five people have died.
While it may be days before the full extent of the cost is known, the sheer number of expensive homes and businesses affected suggests that the overall economic damage will likely be greater than the $30-billion loss caused by the Camp fire across California in 2018, considered the state’s most expensive wildfire to date.
The Maui wildfires in 2023, by comparison, caused $5.6 billion in damages, according to the National Oceanic and Atmospheric Administration.
By the NOAA estimates, Hurricane Katrina in 2005 is the most expensive U.S. natural disaster, costing an estimated $200 billion.
On Thursday, experts at Moody’s said that they expected the insured losses stemming from the L.A. County fires to run in the billions of dollars given the high value of properties in coastal Pacific Palisades, where the first blazes broke out on Tuesday.
Fires burning around Santa Monica and Malibu have torched homes that are among the most expensive in the country, with a median value of over $2 million, said AccuWeather.
(Excerpt) Read more at latimes.com ...
“Lightning strikes happen eventually.”
The EPA, in the interests of no more CO2 emissions, needs to prohibit the NFS and BLM from allowing wildfires on “their” properties.
The smoke out west last year was more than annoying.
Insurance will never cover this without bankrupting them, that is why the companies were withdrawing from the Market. Look for Newsom to ask the Federal Government for an unlimited bailout for everyone affected and they will probably get it.
The scale of the catastrophes is overwhelming the private insurance companies from being able to pay for it. I think they will scale back what a Home Owner’s policy will cover in the future. The sticking point is that if you have a mortgage you have to have home owners insurance. So what will that do to the real estate market? They may have to totally give coverage and price assessed on total risk of where you are.
Agreed on what you are seeing—what do you think is happening?
This may also break CA since a large chunk (don’t know how much) of the insurance was provided by the state.
https://www.insurance.ca.gov/01-consumers/105-type/5-residential/
“ sounds like a low figure”
It does.
But the fires are affecting relatively small areas in all of the LA area.
Devastating to the areas hit.
It’s very very valuable real estate and the redevelopment from scratch will be worth well more than the losses.
I think it will be well above that before this is over.
Your kind of thinking is exactly how decadent fuels accumulated in the Los Angeles Air Basin to the point that, in combination with high winds, produced a fire too big to fight.
This is interesting a real dilemma for the future. I suspect the real cost of the fire will be over $100 Billion and the insurance companies cannot cover this without bankrupting themselves. So that is why companies are withdrawing for certain states. California has an insurance pool but barely adequate for everyday problems and very underfunded. I think California will ask for a huge bailout from the Federal Government to rebuild LA and they will probably get it and yet North Carolina, Georgia, Tennessee and Florida were left out in the cold by FEMA, etc.. This is going to be a huge problem for Trump to deal with. And then you have Biden still sending money to Ukraine during these crises. We better brace for increases this year. I already increased my deductible to $5000, but I may go to $10,000 to keep the premiums low.
I read up on their state insurance pool and this will or could bankrupt them, they only have about $200 Million on hand right now. They can’t cover whatever their part might be.
With respect, the Santa Ana winds are the most powerful I've ever seen. Still, your point is valid about all incompetence regarding lack of water due to demolition of dams and reservoirs, letting the snowmelt and rivers out to the Pacific for some fish bait, reduced funding for the LAFD, Greenies preventing brush/forest management. It goes on from there.
The winds are picking up again in So. Orange County (gusts maybe 50 mph, expected 80 mph tonight). It looks like another sleepless night for us.
For those evacuees who are not prepared.
People, Pets, Pictures, Papers, Prescriptions, Phones.
If time allows, have a couple suitcases ready to throw in anything else, including clothes.
No, in LA, it was not forest floor debris that was the issue.
It was the close proximity of the cheek by jowl houses and a lack of water and air support [high winds precluded air support].
Estimate 4000 houses destroyed. Businesses destroyed are another matter.
Hard drives, favorite ski equipment, and classic vehicles too.
Stuff that can’t be ever replaced.
Thanks—200 million does not go very far with CA real estate.
I found this link:
According to that they only have 3% of the market.
If that is all they have in the affected areas it would be 3% of 50 billion = 1.5 billion.
Using your 200 million cash on hand that means CA will have to eat 1.3 billion.
I DEW not know.
:-)
Biden: Darn it all. All that money could have gone to victims of 1800s slavery and to Ukraine. Life is so unfair.
One of the victims who had to evacuate was a woman who said to the TV interviewer: “Right now we’re staying in the Beverly Hills Hotel.”
Wonder if they ran out of cozy bathrobes and Godiva chocolates on the guests’ pillows?
“Right now we’re staying in the Beverly Hills Hotel.”
That’s where I want to be! (Gimme! Gimme! Gimme! Gimme!)
What will Fed.gov’s ultimate contribution be to this total amount, I wonder?
From “X:
Andrew D. Huberman, Ph.D.
@hubermanlab
People are lighting fires in otherwise non-burning urban areas of LA. Saw this happen first hand at 302 Pico in Santa Monica. Called it in & fire dept & police responded. Stay safe and call in any activity ASAP. We don’t need more flames out here.
0:09 / 0:37
11:10 PM · Jan 8, 2025
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Andrew D. Huberman, Ph.D.
@hubermanlab
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5h
Note: Yes the Fire Department arrived and put the fire out. Yes this was directly across from Belmar Park. For reference:
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