LOS ANGELES – This week, wildfires have ignited across Los Angeles County, and they are expected to rank among the most expensive natural disasters in the history of the United States.
The catastrophic fires have resulted in the deaths of at least 11 individuals and the complete destruction of over 12,000 structures since they began on Tuesday, obliterating entire neighborhoods previously occupied by high-value multi-million dollar residences.
While obtaining a precise financial estimate for the damage is premature, the losses reported thus far indicate that these wildfires may become the most expensive ever experienced in the U.S.
AccuWeather has provided a preliminary financial assessment, estimating damages and economic losses to be in the range of $135 billion to $150 billion. In comparison, the damages from Hurricane Helene, which impacted six southeastern states last fall, were estimated by AccuWeather at $225 billion to $250 billion.
“This wildfire is set to become the most costly in modern California history and likely the most expensive in U.S. history as well, due to its occurrence in densely populated regions of Los Angeles that host some of the nation’s most valuable properties,” stated the chief meteorologist of AccuWeather, Jonathan Porter.
AccuWeather’s estimates incorporate a wide array of factors, including damage to residential and commercial properties, infrastructure, vehicles, as well as both immediate and future healthcare expenses, loss of income, and disruptions in the supply chain.
Insurance broker Aon PLC acknowledged on Friday that the wildfires in Los Angeles County are projected to be the most expensive in the history of the United States, although they did not provide a specific financial estimate. Previously, Aon identified the Camp Fire in Paradise, California, from 2018, as the most costly wildfire to date, with losses adjusted for inflation amounting to $12.5 billion. This disaster claimed 85 lives and destroyed approximately 11,000 homes.
As of Saturday, the wildfires in L.A. County, driven by hurricane-force Santa Ana winds and exacerbated by a significant drought, were still largely uncontained. This means the final assessment of losses is likely to grow considerably.
“To provide context, the overall damage and economic loss from this wildfire catastrophe may approach nearly 4% of California’s annual GDP,” explained Porter from AccuWeather.
A report released on Friday by Moody’s also concluded that these wildfires will likely be recorded as the most costly in U.S. history, particularly due to their devastating effects on densely populated areas with high-value properties.
Historically, California has faced significant wildfires, but these incidents typically affected more rural inland regions, leading to less devastation per acre and lower impacts on affordable housing. Moody’s observed.
In stark contrast, the current wildfire crisis has resulted in extensive property destruction across the Pacific Palisades and Malibu, areas known for housing many celebrities and wealthy executives with lavish estates. Numerous public figures have already lost their homes to these fires.
“The magnitude and ferocity of the fires, coupled with the geographic area affected, imply a staggering impact, both in human losses and economic damages,” reported Moody’s analysts. The report, however, did not include a preliminary financial estimate regarding the wildfire damage.
It may take several months to arrive at a more definitive assessment of the financial ramifications from the wildfires.
“We are still in the very initial phase of this disaster,” concluded Porter.
