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CoreLogic today announced preliminary residential and commercial loss estimates for the Eaton and Palisades Fires in Los Angeles, California totaling between $35 to $45 billion. As of today, both fires are less than 50% contained. CoreLogic says it will provide final insured loss estimates once the fires have been fully contained.
The company’s analysis of both residential and commercial properties accounts for fire and smoke damage as well as demand surge, debris removal, clean up and Additional Living Expenses (ALE).
Residential properties are the majority of the losses, CoreLogic reported. Many of the potentially impacted properties are high-value homes which would equal costly claims even with moderate damage.
“The destruction caused by these fires is anticipated to be the most expensive in the state’s history with effects on the insurance industry that will persist into the future. This event highlights the paramount challenge for homeowners and the insurers that support them – the increasing density of homes and properties near the wildlife-urban interface,” said Tom Larsen, senior director of CoreLogic Insurance Solutions. “Los Angeles is a resilient community, and as they look to rebuild it will be essential to design or redesign with mitigation practices in mind, so an event of this magnitude never happens again.”
In an interview with HousingWire, Larsen discussed how CoreLogic uses aerial data and imagery to get a glimpse at not only the destroyed structures in LA by the fires but also structures impacted by smoke and other hazards.
“We estimate that somewhere between 15,000 and 20,000 homes were sufficiently damaged and that those people, the occupants, are looking for replacement housing, subsequent housing, and that’s quite a pulse on the demand. And we’ve seen some of the indicators of prices going up, certainly in other markets we’ve seen those big increases, but we don’t have a number estimate of what’s occurring,” Larsen shared.
“As for California’s ongoing insurance crisis, this isn’t going to make it better,” Larsen continued. “We’re trying to analyze the reconstruction value of the homes in terms of insurance…We’re using that on every home in the area to come up with our estimates, using data to create a valuation model for how much the home costs and payout for contents.”
Find all of our wildfire coverage here.
