LOS ÁNGELES — The wildfires that erupted this week in Los Angeles continue to blaze, and early estimates suggest they could become one of the most costly natural disasters in American history.
The devastating flames have claimed at least 11 lives and destroyed more than 12,000 structures since Tuesday, sweeping through neighborhoods that were once home to multimillion-dollar properties.
While it’s too soon for a precise financial tally, initial assessments indicate these wildfires may be the most expensive in U.S. history. AccuWeather has preliminarily estimated that damages and economic losses from the fires could range from $135 billion to $150 billion. For context, damages from Hurricane Helene, which impacted six southeastern states last fall, were estimated to be between $225 billion and $250 billion.
Jonathan Porter, the chief meteorologist at AccuWeather, stated, “This will be the costliest wildfire in modern California history and likely the most expensive ever in the United States. This is due to its occurrence in densely populated areas with some of the country’s most valuable real estate.”
AccuWeather takes into account various factors in its estimates, including damage to homes, businesses, infrastructure, and vehicles, as well as immediate and long-term healthcare costs, lost wages, and interruptions to supply chains.
Insurance broker Aon PLC noted that these fires are likely to be the most costly in U.S. history, although they did not provide a specific estimate. The Camp Fire in Paradise, California, in 2018 is currently considered the most expensive wildfire, with costs adjusted for inflation at $12.5 billion. That fire resulted in 85 fatalities and destroyed around 11,000 homes.
Fueled by Santa Ana winds and extreme drought conditions, the fires remain largely uncontained. This suggests that the final count of losses could rise significantly.
“To put this in perspective, the total damage and economic loss from this wildfire disaster could approach nearly 4% of California’s annual GDP,” emphasized Porter of AccuWeather.
Moody’s released a report affirming that these wildfires will likely be the most costly in U.S. history, primarily because they have affected densely populated areas with high-value properties. Historically, major wildfires in California tended to occur in less populated inland areas, resulting in lower destruction per acre and damage to less expensive homes.
This time, however, the fires have reached thousands of properties in upscale areas like Pacific Palisades and Malibu, which are home to many Hollywood stars and wealthy executives. Numerous celebrities have lost their homes due to the wildfires.
“The scale and intensity of the flames, along with their geographical footprint, suggest a staggering cost, both in human and economic terms,” analysts at Moody’s noted. Their report did not include a preliminary estimate of the wildfire damage costs.
It may take months before a concrete assessment of the wildfires’ financial losses is possible. “We are in the very early stages of this disaster,” Porter reminded everyone.
