Thu, Nov 02, 2017 - Page 10 News List

California wildfire losses reach US$3.3bn, climbing

Reuters

An aerial view taken on Oct. 14 shows the devastation of the Coffey Park neighborhood of Santa Rosa, California, after a wildfire swept through.

Photo: AP

Wildfires in California have caused insured losses of more than US$3.3 billion, based on claims reported by 15 insurers, and the figure will rise, the California Department of Insurance said on Tuesday.

The number includes claims for 10,016 partial residential losses, 4,712 total residential losses, 728 commercial property losses and 3,200 personal auto losses, California Insurance Commissioner Dave Jones said on a media call.

Since erupting on Oct. 8 and Oct. 9, the blazes in parts of northern California have burned more than 99,148 hectares and destroyed an estimated 8,900 buildings as of Monday, according to the California Department of Forestry and Fire Protection.

The fires, which Jones said are now 99 percent contained, caused 43 deaths, including a firefighter.

California is the largest US insurance market, where insurers collect about US$289 billion in premiums per year, Jones said.

The US$3.3 billion total is more than triple a US$1.05 billion preliminary insured loss estimate by Jones on Oct 19.

“I am concerned that the fires we just experienced are not an anomaly and may represent the new normal,” Jones said. “We know that the climate is changing and the temperature has been rising.”

The devastation included neighborhoods in Santa Rosa, California, that had been deemed to be at low risk for fire, Jones said.

That could prompt some insurers to update how they determine which areas are potentially risky and then decide to write fewer policies in those places, decisions that could affect “significant parts of California,” Jones said.

Insurer Travelers Cos Inc, which announced its third quarter results on Oct. 19, also warned investors of large claims likely this quarter from the wildfires.

An analysis released on Friday last week by Boston-based AIR Worldwide pegged insured losses at an estimated US$2 billion to US$3 billion.

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