Catastrophe risk modeller AIR Worldwide has estimated the insured loss from the Woolsey fire, which tore through Southern California for 13 days last month, at $2.5 billion.
This estimate is based on the assumption of nearly 100% take-up rates as damage from fire, including wildfire, is included in standard homeowners’ policies in California.
AIR says Woolsey was a vegetation fire ignited on November 8 south of Simi Valley in the southeastern corner of Ventura County and spread quickly due to Santa Ana winds and low humidity, as well as challenging suppression factors including steep terrain, limited access, and extreme fire behaviour.
Full containment was achieved on November 22. The cause of the Woolsey Fire is still under investigation, according to the final update issued by Los Angeles County Fire Department on November 25.
In total, the Woolsey fire burned through 96,949 acres and 1,643 structures; another 364 structures were damaged.
AIR has pointed out that the economic losses are expected to be higher than the industry insured loss estimate.
Corelogic last week placed the total economic hit from Woolsey at between $4 billion and $3.5 billion.
Of this figure, Corelogic stated that residential property losses accounted for between $3.5 billion to $4.5 billion, with up to $500 million attributable to commercial property loss.
Due to uncertainty in the payment of additional living expenses resulting from mandatory evacuations, loss of some individual structures outside of the most affected neighbourhoods, as well as widespread but lower levels of loss due to smoke, loss of electricity, and damage from suppression efforts, AIR has stated that the actual insured losses could creep higher than its current $2.5 billion estimate.
AIR’s insured loss estimates includes insured physical damage to property (residential, mobile home, and commercial), both structures and their contents, and auto; and direct business interruption losses
It’s insured loss estimates does not include losses to uninsured properties; losses to land; losses to infrastructure; losses from indirect and contingent business interruption; loss adjustment expenses; demand surge-the increase in costs of materials, services, and labour due to increased demand following a catastrophic event.