The insurance and reinsurance industry loss estimate for the northern Californian Camp wildfire has now been estimated as from $6 billion up to $9 billion by catastrophe risk modeller AIR Worldwide.
AIR last week estimated that the southern California Woolsey wildfire would cost the industry at least $2.5 billion.
As a result, the estimate for the combined impacts of the recent Californian wildfires from AIR sits in a range from $9 billion and $13 billion, which perhaps a little surprisingly is precisely the same estimate given by rival risk modeller RMS on November 19th.
Of course that makes AIR’s Woolsey wildfire loss estimate range $3 billion to $4 billion now.
AIR noted that its estimate of insured wildfire losses is based on the assumption of nearly 100% take-up rates in the area, as damage from fire, including wildfire, is included in standard homeowners’ policies in California.
The estimate includes insured damages to property (residential, mobile home, and commercial), both structures and their contents, and automobiles, as well as direct business interruption and demand surge.
AIR said there is uncertainty in the estimate range due to items such as payment of additional living expenses, loss of some individual structures in areas outside those most impacted, extra expense and ordinance losses, smoke related loss, loss of electricity, and damage from suppression efforts.
As we said, catastrophe risk specialist RMS RMS estimated that insurance and reinsurance market losses would be in a range between $9 billion and $13 billion across both the Woolsey and Camp wires, while reinsurance broker Aon said that the economic cost of the wildfires would “minimally exceed” $10 billion “if not much higher.”
Moody’s most recently said that the insurance and reinsurance industry loss could be as high as $15 billion, across the two fire outbreaks.
So opinions are certainly converging, about the size of the insurance and reinsurance industry loss from these wildfires.
However, there is still some uncertainty over how claims will be treated, we can reveal, as sources tell us to watch out for the hours clause, which does have the potential to make this into a more costly than expected event for the industry, so the chances of the eventual total being towards the upper-end of all of these guidance estimates.
Read our previous coverage of this wildfire outbreak: