Insured residential and commercial losses from the Carr and Mendocino Complex wildfires, which burnt through Northern California from late July through August 2018, are expected to exceed $845 million, according to the California Department of Insurance (CDI).
More than 10,000 claims have been filed related to the fires, which collectively damaged or destroyed more than 8,800 homes, 329 businesses, and more than 800 private autos, commercial vehicles, and other types of property.
Insurance Commissioner Dave Jones said that the Carr and Mendocino Complex fires are now counted among the most destructive wildfires in California’s history.
However, the CDI’s latest estimate of insured losses is more conservative than many earlier estimates, with Aon and Moody’s putting initial industry loss estimates at between $1 billion and $1.5 billion for the Carr fire alone.
“Our wildfire history tells the story of how our fire season has changed over the years from a four-month season to a year-round threat,” said Commissioner Jones.
“Over the past two decades, the frequency and severity of wildfires has increased and caused significant property damage and the tragic loss of life in the wildland-urban interface areas of the state. Even more troubling is that areas once considered not to be high risk are now being scorched by wildfires.”
According to the California Department of Forestry and Fire Protection (CALFIRE), 17 of 20 most destructive wildfires in California have occurred after September 1st, meaning the worst may be yet to come for the state this year.
“The Carr and Mendocino Complex fires not only caused staggering losses to thousands of Californians, they devastated entire communities and tragically cost many people their lives, and were among the most destructive fires in our state’s history,” continued Jones.
In conjunction with the CDI’s loss estimate announcement, the commissioner also released a new report on how climate change is impacting wildfire losses in California.
“As Insurance Commissioner, one of my responsibilities is making sure insurance companies take into account and address climate-related physical, transition and liability risks, which can have consequences for insurers’ underwriting and the investing of their reserves,” said Jones.
Evan Mills, author of the report, also commented: “The Trial by Fire report is unique in its simultaneous focus on insurance and climate change in the California context, and it is the first of its kind to emanate from the offices of a forward-looking state insurance regulator.
“Regulators are the natural entities to look into this, as their role is to safeguard the financial viability of insurers while maintaining availability, affordability, and adequacy of insurance for consumers. As we see in the wildfire data released today, regulators are also important compilers and distributors of raw data on loss costs.”
