Carriers may not have accounted for a recent increase in levels of property maintenance and construction activity across Butte County in their damage assessments for California’s Camp Wildfire, according to BuildFax, a provider of property condition and history insights.
BuildFax found that local maintenance activity increased by 8.57% year-to-date compared to January through October 2017, which suggests that insurers may not have accurate assessments of the Camp Fire’s true damage on their books.
Additionally, BuildFax data shows that property remodels rose by 7.83% in that same time frame. These tend to be larger scale projects that make premium-impacting changes to a structure.
“These increases demonstrate a substantial level of construction activity that may be unaccounted for when it comes time for carriers to pay out claims,” a report from BuildFax stated.
The Camp Wildfire became the deadliest and most destructive wildfire in California’s history after burning through the town of Paradise, Butte County on November 8, destroying around 18,793 structures and killing 85 people, according to the latest data from Cal Fire.
Recent estimates from catastrophe risk modeller CoreLogic put economic losses from the Camp Wildfire in the region of $11 billion to $13 billion, while RMS said insured losses for both the Camp and Woolsey Fires could reach $13 billion.
BuildFax said it expects the Camp Wildfire’s total cost to the state, re/insurers and homeowners to top $19 billion.
Carriers may face an arduous claims pay-out process if the level of maintenance and remodelling activity in Butte County results in inaccuracies regarding estimations of the value of many structures.
Residential maintenance costs related to fires in California have been steadily increasing over the past five years, BuildFax noted, but 2018 saw the largest jump with costs rising 93.80% year-over-year as of October 2018, which is not surprising following 2017’s active wildfire season.
Prior to the Camp Fire, a combination of the Tubbs and Atlas Fires in Napa, Thomas Fire in Santa Barbara, and Redwood Valley Complex Fire in Mendocino made up the costliest fire season on record, and BuildFax anticipates an even larger jump in wildfire costs following the Camp Fire.
