Insured property losses for Palisades, Eaton fires estimated up to $35B: Verisk

Verisk Analytics Inc.’s Extreme Event Solutions group Wednesday forecast insured losses to property for the Palisades and Eaton fires combined will fall between $28 billion and $35 billion.

The estimate includes losses due to fire and losses to the California FAIR Plan, Verisk said in a statement.

Insured losses from the Palisades fire are forecast to range between $20 billion and $25 billion, while losses from the Eaton fire are expected to range between $8 billion and $10 billion, with most of the losses to residential risks, Verisk said.

Estimates include losses to residential, commercial, and industrial properties and automobiles for their building, contents, and time element coverages and account for demand surge, debris removal and estimated insured take-up rates.

Verisk said its loss estimates do not include losses from smoke damage; losses from the Hurst fire or other fires during this past month other than Palisades and Eaton; losses exacerbated by litigation, fraudulent assignment of benefits, or social inflation; losses from guaranteed replacement cost coverage; losses from ordinance or law coverage; losses to uninsured properties; losses to infrastructure; losses from extra-contractual obligations; losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event; or loss adjustment expenses.

In a separate note late Friday, Moody’s RMS Event Response said it estimates insured losses for the January 2025 Los Angeles firestorm events will likely range between $20 billion and $30 billion.

This preliminary estimate reflects observations to date but includes “significant uncertainty” as some of these fires continue, with the Palisades fire just 31% contained and the Eaton fire 65% contained.

Moody’s RMS Event Response said it will issue its final insured industry loss estimate for these events after their full containment.

The Moody’s RMS Event Response estimate includes losses from property damage, including evacuation and smoke damage, business interruption, and additional living expenses across residential, commercial, and industrial lines, Moody’s said.

The estimate also accounts for the California FAIR Plan, which has more than $112 billion exposure, or 23% of its portfolio, in Los Angeles County as of Sept. 30, 2024.

Estimates of insured losses have run as high as $45 billion.