Catastrophe risk modelling firm AIR Worldwide has estimated that insured losses from the Camp Wildfire, which burnt through California’s Butte County last month, will be in the range of $6 billion to $9 billion.
The Camp Wildfire became the deadliest and most destructive wildfire in California’s history after devastating the town of Paradise on November 8, destroying a total of 18,793 structures, killing 85 people and burning through 153,336 acres.
Combined with losses from the Woolsey Wildfire, which AIR calculated last week, the total industry loss for the two wildfires stands at between $9 billion and $13 billion, according to the firm.
This is the same insured loss range that was provided by catastrophe modeller RMS in its analysis last month.
AIR’s wildfire estimate accounts for insured physical damage to property, both structures and their contents, and auto, as well as direct business interruption losses and demand surge for an anticipated increase in costs of materials, services and labour following the fires.
It does not include losses to uninsured properties, land or infrastructure, as well as losses from indirect and contingent business interruption or adjustment expenses.
The assessment is based on the assumption of nearly 100% insurance take up rates, given that damage from fire is included in standard California homeowners’ policies.
Other recent estimates from Moody’s suggest that insured losses from both wildfires could be between $10 billion and $15 billion, while CoreLogic put combined economic losses at $15 billion to $19 billion.
AIR said that its loss range reflects uncertainty in the payment of evacuation expenses, as well as the loss of structures outside of the most affected areas, extra expense and ordinance losses, and losses due to smoke, lack of electricity, and damage from suppression efforts.
The estimates were derived using AIR’s U.S Wildfire Model and are based on exposures as of the end of 2017.
