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Early estimates of insured losses arising from the Northern California wildfires put the tab at up to US$3 billion – but that may be too low, one expert claims. Much too low.
Dan Dick, executive managing director at Aon Benfield Analytics, said that early loss estimates suggest the insurance and reinsurance industries will be looking at a bill between US$5 billion and US$8 billion.
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That’s a huge spike from the US$1.045 billion preliminary estimate the Insurance Commissioner of California released earlier this month. Risk-modeling company AOR Worldwide had projected the losses to be between US$2 billion and US$3 billion. However, the fire has now destroyed about 8,400 structures, according to a report by Artemis. It’s broadly expected that the insurance and reinsurance industries are about to face their highest wildfire-related costs on record.
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The wildfires destroyed thousands of homes and businesses and killed at least 42 people as they raged through Northern California, Reuters reported. The AOR estimate projected that losses would be dominated by damage in residential areas – particularly in Sonoma County, where entire neighborhood blocks were destroyed.
Most of the property loss was concentrated in the state’s famous wine country, according to Reuters. The wildfires have burned about 245,000 acres across several counties since starting on October 08.
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