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particle for direct object Devastating fires The one that hit Southern California last week could insure losses of more than $30 billion, according to a new analysis.
At least 24 people have lost their lives in the big forest fire Los Angeles areaWhile officials say at least 12,000 structures have been damaged or destroyed in the fires.
Financial analysts at Wells Fargo Securities issued a report to clients on Sunday that said their “base case” for insured losses from the fire was $30 billion, adding that total losses could be between $20 billion and $40 billion. be dollars
Overall, about 85 percent of claims come from homeowner's policies, compared to 13.5 percent for commercial property and 1.5 percent for personal auto claims, Wells Fargo's analysis found. The base file noted that the average property value in the areas affected by the fires is about $3 million.
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An aerial view shows destroyed homes as the Palisades Fire rages on January 9, 2025 in Pacific Palisades, California. (Mario Tama/Getty Images/Getty Images)
“Regardless of the outcome, we see this as a manageable event for insurers Wells Fargo analysts wrote They noted that on a total insured loss of $40 billion, that would be a 2 percent loss in equity for policyholders.
Under the $30 billion base case for Insured losses$25.5 billion of that comes from homeowner's policies, compared to $4.05 billion from commercial lines and $450 million from auto policies. That would result in a smaller stock hit of 1.6%.
last week, JP Morgan analysts It released an initial estimate of insured losses at $20 billion. That figure makes the Southern California wildfires the most destructive in the state's history, as estimated by Wells Fargo at $30 billion.
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Chimneys stand amid debris after the Palisades Fire broke out in Pacific Palisades, California, on January 8, 2025. (AGUSTIN PAULLIER/AFP via Getty Images/Getty Images)
Either estimate would make this month's wildfires the costliest in California state history, surpassing the 2018 Camp Fire, which caused about $10 billion in insured losses.
The Camp Fire in the northern California city of Paradise and several nearby neighborhoods has killed 85 people and affected more than 18,000 buildings.
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Khaled Fawad (L) and Mimi Lane (R) inspect the belongings of a family member destroyed by the Eaton Fire on January 9, 2025 in Altadena, California. (Justin Sullivan/Getty Images/Getty Images)
The composition of insured losses from the campfires described by JPMorgan was similar to that of the Southern California wildfires analyzed by Wells Fargo.
The JP Morgan report noted that personal property losses accounted for about 86 percent of losses, compared to 12 percent for commercial property and 2 percent for other lines and auto insurance. He added that because Southern California Fires affecting larger population centers are expected to result in higher insured losses.