You’re bound to find variability in the total cost estimates related to the damage and destruction caused by the wildfires in Southern California, but some of the variations are exacerbated by what is included versus what is excluded in these estimates.
According to CoreLogic, the total damage cost estimate for the Los Angeles wildfires as it relates to insured properties is currently at $30 billion. Jon Schneyer, the company’s director of catastrophe response, said in an interview with HousingWire that this estimate is derived from potential insured losses within the perimeters of the Eden and Palisades fires.
“That’s assuming every property within the perimeter is burnt to 100%,” he explained. “Again it’s a ceiling, so it’ll probably be a subset of that, assuming the fires don’t spread. We’re looking at about 8,500 properties within the Palisades wildfire perimeter, and about 8,000 inside the Eaton perimeter. Assuming all of those burnt, that’s about a $30 billion insured loss event.”
On Monday, AccuWeather published its own revised estimate of the total damage that was then picked up by several major news outlets. It said the total cost could be $250 billion to $275 billion. This would push it beyond what was observed in 2024 with Hurricane Helene (estimated at $225 billion to $250 billion), and well beyond the 2023 wildfires that destroyed Lahaina on the Hawaiian island of Maui ($13 billion to $16 billion) according to NBC News.
“This is already one of the worst wildfires in California history,” Jonathan Porter, AccuWeather’s chief meteorologist, said in a statement. “Should a large number of additional structures be burned in the coming days, it may become the worst wildfire in modern California history based on the number of structures burned and economic loss.”
But CoreLogic and AccuWeather are also focusing on different things, Schneyer explained. While CoreLogic is focused on the impact to insured properties, AccuWeather is focused on estimating the total economic losses stemming from the fires.
“Total economic damage is a difficult thing to model with precision and accuracy,” Schneyer explained. “You’re accounting for a lot of things that are difficult to model the damage to. A lot of the dollars could come from things like investments, and will not be only physical damage. It could [include] dollars lost because of lack of access to a particular area, for instance.”
Of the total economic loss, $150 billion to $200 billion or more does not strictly include what is happening in Los Angeles. It could also include impacted markets, supply chain challenges or financial market connections that could be impacted in some way by the fires, Schneyer said. This adds to the modeling challenges, particularly as the situation is still developing and a full damage assessment will be difficult while firefighters are still battling the blazes.
Categorizing what counts as a “structure” is also a source of emerging debate. According to reporting by the Associated Press (AP), some officials have suggested that categorizing “structures” may also include vehicles, which authorities typically do not include when estimating fire damage.
According to Chris Thomas, a spokesperson for the unified incident command team for the Pacific Palisades fire, initial estimates are taken from infrared imaging that could make it challenging to tell whether or not a damaged object is a building or a vehicle. This could ultimately bring down the tally of estimated damage to structures, but the situation is evolving quickly since the fires are still burning.
“We’re trying to be transparent and say, ‘This is what we’re doing,’ but then we have to go back and explain, ‘Well, here’s why cars might be counted,’” Thomas told the AP.
