Latest California wildfires costlier than previous blaze, experts say

Latest California wildfires costlier than previous blaze, experts say | Insurance Business America

Latest California wildfires costlier than previous blaze, experts say
Still reeling from the October wildfires that plagued Northern California not too long ago, insurers and other industry experts are expecting the worst following the most recent blaze affecting southern portions of the state.

Moody’s Analytics senior analyst Adam Kamins told The Financial Times that the cost of the Thomas Fire alone (considered the most severe of the Southern California wildfires) would be about $1.5 billion. Kamins also said that those losses could rise sharply in the coming days, depending on how wind conditions help spread the fires.

“The current siege of wildfires in Southern California meets all the criteria for extreme loss-causing fires in that area: dry vegetation; fire ignitions in the wilderness close to residential areas; fierce . . . and recurring Santa Ana winds,” commented AIR Worldwide manager and principal scientist Tomas Girnius.

State officials have warned that approximately 18,000 properties are at risk of being damaged or destroyed by the Thomas Fire. As of December 17, only 1,230 structures had been hit.

Although the October 2017 Northern California wildfires destroyed far more buildings than the Thomas Fire – about 8,900 – Kamins believes the Thomas Fire could potentially be costlier to insurers.

“The homes that are being destroyed are generally in fairly wealthy areas,” he said, adding that unlike the previous wildfire incident or other calamities in recent time, most of the loss will likely be covered by insurance.

“While there’s fewer properties that have been damaged compared with October [the Northern California wildfires], the expectation is that they’re probably more expensive,” observed TigerRisk partner Mike Schnur.

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