Multiple fires with rage It will cost throughout the Los Angeles area insurers As much as $30 billion, Wells Fargo and Goldman Sachs estimated in a report released this week.
After accounting for uninsured damages, total costs will rise by $40 billion, the report said.
The ongoing fires, according to analysts, “already appear to be the costliest wildfire event in California history.”
The forecast would make the fire one of 20 the most expensive Natural disasters in US history, when calculated as a share of the nation’s gross domestic product, the analysts added.
The fires have left a trail of debris in their wake. More than 12,000 homes and other structures have burned in the fire, the California Department of Forestry and Fire Protection said.
At least 24 people have died and more than a dozen are missing as multiple fires, fueled by severe drought conditions and strong winds, continue to burn.
Thousands of firefighters are battling 45 square miles of fires in Los Angeles County. About 92,000 people remain under mandatory evacuation orders and another 89,000 are under evacuation warnings.
There has been an increase in high-cost natural disasters tense up insurance and helped drive up home insurance premiums nationwide, experts previously told ABC News. Also, a recent spike in inflation has made home construction and repairs more expensive, they said, further reducing costs for insurers.
Industrial unrest around California’s insurance market demonstrates the role climate change has played in driving up premiums and struggling insurers, some experts say.
A worker assesses damage from the Palisades fire in the Pacific Palisades neighborhood of Los Angeles on January 13, 2025.
John Locher/AP
The average price of home insurance in California jumped a whopping 43% between January 2018 and December 2023. S&P Global they found it last year.
In recent years, many insurers have reduced or stopped offering coverage in California as fire risks have increased. With more frequent and more intense fires, insurers have the potential for more claims and higher costs.
While wildfires are a natural and necessary part of the Earth’s cycle, climate change and other more direct human impacts have increased their likelihood. Climate change is making natural events more intense and more frequent, research shows the shows.
Residents and homes in Los Angeles continue to be threatened by wildfires.
An “extremely hazardous state” with a red flag warning will go into effect Tuesday for much of west Los Angeles and Ventura County, weather officials said, as winds threaten to exacerbate Southern California’s historic wildfires.
ABC News’ Kevin Shalvey, David Brennan, Emily Shapiro, Meredith Deliso, Max Golembo, Matthew Glasser and Julia Jacobo contributed to this report.
