Insured California Wildfire Losses May Exceed $6 Billion

California’s increasingly-destructive wildfires are estimated to trigger billions of dollars in insurance claims.  As of November 2018, estimates show 15 wildfires in California destroying nearly 7,000 homes and business; 31 people have been killed and nearly 300,000 evacuated.  Beyond the loss of life and property damage implications for typical homeowner’s insurance coverage, the fires and attendant evacuations also potentially implicate business interruption or other commercial insurance provisions. Furthermore, the approximately 300,000 evacuated people will have significant additional living-expense claims under their homeowner’s coverage due to being forced to pay for temporary shelter and relocation costs.

Total losses are estimated at approximately $6.8 billion so far.   The price tag to rebuild will be particularly high because construction demand is already up from the 2017 wildfires and the strong housing market, leading to increased demand for construction labor and materials.  This high price tag translates to greater losses for homeowners and their insurance carriers.

California’s current wildfires are now the most destructive and deadliest on record.  From an insurance perspective, the destruction is particularly acute in high-property-value areas like Malibu.

The California wildfires serve as a reminder to policyholders to make sure they’re adequately covered for disaster losses, and to always act proactively to protect their rights after a loss.

One thought on “Insured California Wildfire Losses May Exceed $6 Billion”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s