The recent Camp and Woolsey wildfires in the state of California are estimated to have caused total residential and commercial property losses of between $15 billion and $19 billion, according to Corelogic.
Corelogic said that its updated residential and commercial property loss estimate for the recent wildfires in California put total losses from the Camp Fire in Northern California at between $11 billion and $13 billion, while total losses from the Woolsey Fire in Southern California are pegged at $4 billion to $6 billion.
This compares to RMS’ estimate of insurance and reinsurance market losses in a range between $9 billion and $13 billion and reinsurance broker Aon’s statement that the economic cost of the wildfires would “minimally exceed” $10 billion “if not much higher.”
Corelogic said its new estimate for the cost of the wildfires is based on the latest post-containment perimeter of both the Camp and Woolsey Fires.
It accounts for insured and uninsured losses from building, content, and Additional Living Expenses (ALE) claims across residential and commercial properties affected by these wildfires, and the estimated losses include fire, smoke, demand surge and debris removal.
Between $8 billion and $9 billion of the Camp fire loss estimated is from residential property impacts and the remaining $3 billion and $4 billion is from commercial property damages.
The Woolsey fire is estimated to have caused between $3.5 billion and $5.5 billion of residential property damage and up to $500 million of commercial property damage.
“These wildfires have been a personal and financial tragedy for many families,” commented Tom Larsen, principal, Industry Solutions at Corelogic. “The proper estimation of the value of a home is critical because often in situations of wildfire, the home is completely lost. A deficient valuation can lead to a situation where homeowners have inadequate funding to replace their home.”
Corelogic told Artemis that the uninsured portion of their estimate is expected to be small, suggesting the majority will be covered.
Corelogic’s new wildfire property loss estimate suggests the final insurance and reinsurance market loss will be significant for ILS markets and it increasingly looks set to fall on reinsurance and retrocession capital providers.
It’s worth considering that factoring in the way contents and additional living expenses are paid for, the majority of the higher value property claims are expected to come in significantly higher than the actual cost of the property itself.
Also factor in the other vectors of insurable wildfire loss, such as automotive business lines, demand surge, business interruption, which can all add to the eventual insurance and reinsurance market impact from the wildfires.
As the wildfire loss picture becomes clearer it seems the industry toll is set to be yet another large 2018 catastrophe loss for insurance, reinsurance and ILS interests.
Read our previous coverage of this wildfire outbreak: