Pacific Palisades, Eaton, Hurst fires intensify; Hollywood Hills, Woodley, Lidia fires ease; five people dead; celebrity homes destroyed
The potential cost for insurers of the Los Angeles fires is already expected to be 10 times higher than Australia’s Black Summer bushfires.
Analysts at JPMorgan Chase & Co predict insurance claims to surpass $US20 billion ($32.3 billion) – double the $US10 billion they predicted a day ago. In a briefing note to clients overnight, the analysts warned losses could rise further if the fires are not controlled and devastation keeps spreading.
The total damage and economic losses — which include uninsured destruction and indirect economic impact such as lost wages and supply-chain disruptions — will land somewhere between $US52 billion and $US57 billion, according to a preliminary estimate from Accuweather.
Hospital beds lay abandoned after a nursing home in Altadena was evacuated.Credit: Los Angeles Times via Getty Images
In Australia, the insurance industry paid out $2.5 billion over three years for the 2019-20 bushfires up and down the east coast, according to a Suncorp submission to the Australian Treasury.
California’s home insurance market has faced a growing crisis in recent years, with traditional insurers pulling back from the state blaming the rising cost of natural catastrophes and stringent pricing regulations.
Many homeowners have flocked to California’s FAIR Plan, the state’s last-resort insurer that warned last year it wasn’t financially prepared to cover the costs of a major catastrophe.
The 2018 Butte County Camp fires in 2018, which cost $US10 billion in insurance claims, were California’s costliest fire event until now. Hurricane Katrina in New Orleans in 2005 remains the United States’ most expensive natural disaster, Allianz says, costing more than $US60 billion in insured losses and more than $US125 billion when you include uninsured losses.
In Australia, when you account for inflation, insurance industry figures show the top three costliest disasters were the 1999 Sydney hailstorm, which damaged vehicles and roofs, followed by Cyclone Tracy in 1974, followed by the 2022 east coast floods.
With Bloomberg
