How Much Did the Fires in California Cost? Answers Emerge.

“The most destructive and deadliest” fires in the state’s history.

The wildfires in California’s North Bay area that started on October 8 and killed 44 people – “the most destructive and deadliest in our state’s history,” as the California Department of Insurance said on Wednesday – caused $9.0 billion in claimed losses so far. This is triple the $3 billion of claimed losses insurers reported a month ago.

With the October fires in southern California included, the amount of losses rises to $9.4 billion.

This does not include the losses from fires currently raging in Southern California, such as the Skirball fire in the Bel Air neighborhood of Los Angeles that is threatening the homes of many celebrities and potentates – including Elon Musk, who owns five homes in the neighborhood, and Rupert Murdoch. The fire is also threatening the Getty Museum. Any losses from those current fires will be on top of the $9.4 billion.

We say that there are two seasons in California: rainy season (if any) and fire season. This year, both of them have been ferocious.

The report by the insurance commissioner is based on claims data as of December 1, supplied by over 260 insurance companies. Any claims made after that date are not included. The insurers reported some sobering numbers of the devastation, according to claims filed by policy holders so far:

  • 5,747 residential properties that are total losses
  • 15,359 residential properties that are partial losses
  • 2,814 commercial property claims – businesses and apartment buildings with four or more units – including 997 total losses.
  • 6,101 private and commercial vehicles.
  • 788 losses involving other lines of insurance such as agricultural equipment and watercraft.

Sonoma County got hit the hardest among the impacted counties with nearly $7.49 billion in claimed losses, including:

  • $6.9 billion in claims by 14,686 policy holders of residential personal properties, including 4,785 for total losses.
  • 480 million in claims for commercial properties.
  • $70 million in claims for vehicles.

Napa County accounted for $1.27 billion in claimed losses, including $1.1 billion for residential properties, involving nearly 2,500 claims, with 447 for total losses.

In Mendocino County, policy holders have filed $182 million in claims so far. The counties of Butte, Lake, Nevada, Yuba, and in southern California, Orange also sustained losses.

Of the $9.4 billion in claims, insurers have so far paid out $3.19 billion, according to the Insurance Department.

But numerous homeowners are finding out that their homes were underinsured. Vehicles without comprehensive insurance were not covered. Countless personal items were destroyed that were not insured.

Marijuana growers were not covered. Under California law, medical marijuana has been legal for two decades, and “recreational” marijuana will become legal on January 1. Under Federal law, all of it remains illegal, creating a no-man’s land for insurers and banks in the booming business. Some of the crops, buildings, and equipment were destroyed. None were insured. Anecdotally, it was reported that some properties burned down with substantial amounts of paper cash inside as banks don’t service this industry.

Part of the land turned to ash, including entire neighborhoods of Santa Rosa. Business operations were disrupted and jobs disappeared at least temporarily. Infrastructure was damaged. Tourism – a big thing in beautiful Sonoma County – has taken a major hit. And a lot of other damage occurred that was not covered by insurance. So the ultimate monetary damage will be far larger than the aggregate insurance claims reported by the industry — and may never be fully known.

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  53 comments for “How Much Did the Fires in California Cost? Answers Emerge.

  1. Raymond Rogers says:

    Here is one of the areas covered by federal aid. I wonder what the total numbers are of those who qualify.

  2. Rob says:

    is that the second or third strike for cat bonds?

  3. hidflect says:

    So… if people receive federal aid then renters are having their tax money used to help out landlords?

    • walter map says:

      Don’t be absurd. CA is a blue state and no more likely to get federal attention than Puerto Rico. Well, maybe a token amount, just to shut up the critics.

      • Tom says:

        A good way to look at is that it is a golden opportunity to take all that ins. cash and head for greener pastures.Then the state”GREENIES” can declare the entire area as a wild life sancuary.

        • walter map says:

          No can do. Protecting public lands was the old policy. The new policy is to make the vulnerable.

        • Drango says:

          That’s actually a good idea. CA is a bonfire waiting to happen, and sprawl just makes the problem worse. But liveable areas would have to be fireproofed, and Californians are too house crazy to consider living sustainably in an area where high winds and dry conditions are common. I wonder at what point the insurance companies will start charging a premium for fire coverage? Maybe the government will subsidize them like it does people who build houses in flood zones.

        • GERALD STEHURA says:

          Greenies? Is that a disparaging remark about people concerned about our planet and ecosystem?

      • Raymond Rogers says:

        Why did you assume that he was making a partisan statement? All he said is that the owners may be subsidized by the very people that rent from them.

        Perhaps you wanted to seize any opportunity you could to take a shot of how the federal government has handled Puerto Rico? Are you filled with political anger 24 hours a day?

      • Mike G says:

        The Republicans’ tax “reform” allows deduction of personal losses from hurricanes, but not from wildfires or earthquakes.
        Gee, I wonder why those are treated differently.

        • Raymond Rogers says:

          Have you read it? To my knowledge the final piece has not been crafted as of yet. If it has been, I’d love to read it.

        • Avon Rep. Cindy's Husband says:

          The three words that answer that are 1.republicans 2.texas 3.california easy to figure out.

  4. derek says:

    FEMA assistance is only for one’s primary residence. Landlords can apply for an SBA loan to repair the building that is rented; the renters might still qualify for temporary housing assistance and personal property replacement and other needs help

  5. Walker says:

    And, they haven’t any idea how big the losses will be relating to the horrible fire currently raging in Ventura County.

    • walter map says:

      “How Much Did the Fires in California Cost?”

      No one can be sure until the incineration stops, and that’s bound to take a while. They’ll have a better idea once the smoke clears, so to speak.

  6. walter map says:

    Climate change gives California’s wildfire season an unwelcome boost

    Wildfires are burning “at a time of year historically most of us expected there to be little to no danger.”

    You can add the costs of catastrophic climate change to your fuel bill. And keep adding them, because they’re not going to go down.

    And you probably thought it was just wet streets in Miami.

    • I expected this, I have been here 50 years, and despite last years better than average rainfall we had a decade long drought. We seem to be back to that pattern, and so January is also fire season if there is no rain in the areas where people live, and not the high sierras where the ski lifts are open?

      • walter map says:

        Unfortunately, a good rainy season generates more fuel. That’s how it is in socal’s Mediterranean climate, which even more unfortunately appears to be transitioning to a Saharan climate. Investment in water management might cure that but would be expensive, although probably a lot less than what it’s costing now. Again unfortunately, water rights were locked down last century when a temporary wet period created unreasonable expectations, and that has so far proven impossible to change.

        • NoEasyDay says:

          It looks like PG&E is now de-energizing their power lines ahead of anticipated high winds. They learned something from the Napa-Sonoma fires.

      • MaryR says:

        Google “hundreds of years of drought in California”…you will find that science confirms a dry/drought-laden climate lasting for 5000 years, starting about 8000 years ago.

        In a meteorology course I took at Berkeley in the 1990’s the Professor opined that drought is actually a normative State for California’s predominantly desert climate.

        Maybe the people should the referendum process to demand desalination capacity on the entire coast….otherwise, it can get mighty thirsty, since the government does nothing…

    • kam says:

      California has been on fire, at least as far back as the 1960s. More and more population in dry brush country and the Santa Ana winds is the problem.

      “Climate Change” is bogus. Let me know when the streets of Miami require a canoe.

  7. unit472 says:

    To put it in some perspective, $10 billion in a state of 40 million people amounts to about $250 per person. Obviously the losses are not distributed on a per capita basis but it does show that states, in all but the most catastrophic events ( in California’s case the next 7 plus earthquake) should not rely on Federal funding.

    • walter map says:

      That should leave plenty for more corporate tax gifts and military pork. Fire victims would just waste that tax money trying to rebuild their lives.

      It’s important that the nation has its priorities right, and contrary to the Preamble, the welfare of actual people should never be a priority.

      • unit472 says:

        If California managed its affairs better it would have a rainy day fund for just these sort of ( inevitable) disasters. The problem is the pigs in Sacramento have never seen a pile of money they won’t spend/waste on gold plating pensions or ‘education’ even if the schools don’t educate it buys votes and that is what counts.

        Now what is this ‘tax gift’ you mention? Is that the money people earn and are not entitled to because you can spend it better than they? The only ‘tax gift’ I know of is the Earned Income Tax Credit where you are paid to file a tax return.

        • James Levy says:

          I hope your house goes one fire, and those parasite government workers the firemen show up, and like good libertarian entrepreneurs demand $50,000 cash on the barrelhead or you can watch your house go up in smoke. But don’t you call the cops, because they’re just grifters waiting for those bloated pensions you point out that Sacramento hands out for votes.

        • walter map says:

          “If California managed its affairs better it would have a rainy day fund for just these sort of ( inevitable) disasters.”

          As if that would do any good. Texas has a rainy day fund, but when it rained several feet in Houston they refused to spend it because it was generating so much interest for political contributors.

          You Yanks have catastrophic events going in DC and on Wall St. and the sky’s the limit for bailing those out. Perhaps they’re ‘more deserving’, huh?

        • alex in san jose AKA digital Detroit says:

          Ya know, if I were running as crooked a gambling house as American Capitalism, I’d want to keep it on the hush-hush. But noooo…. we Yanks seem to be all about flaunting it. “See how horrible life can be if you just adopt this kind of society? Lookit this! No water in Flint. No water in lots of small towns. Millions of homeless people. People dying because they can’t crowdfund the $50 for their insulin. People ending up on the street because of medical bills. All this can be yours, just sell your soul…”

          We are the evil empire.

          But wait! Bitcoin will save us!

    • Wolf Richter says:

      FEMA funding doesn’t cover insurance claims. It covers other things that are not covered by insurance, and part of it goes to affected households.

    • I agree with this. Disaster relief generally isn’t a federal issue. Each state should carry its own self-insurance fund equal to, say, 10-20% of annual state tax revenue. National taxpayer money should only be spent in a state if a disaster is large enough to wipe out the state’s own fund.

      The Federal Government is too large. Once a Federal capability exists, such as FEMA, there is pressure to use it (“because otherwise it’s a waste”?), and there are stakeholders demanding its enlargement, leading to perpetual bureaucratic bloat. The Fed Gov is now demonstrably too complex to be managed effectively by Congress. Scandal after Scandal!

      • QQQBall says:

        Dude, and fund, self-insurance or otherwise, will get borrowed into the general fund and spent on pork. How many states or municipalities allow even a 1% contingency fund. Spend, Spend, Spend.

        I was in the city of Rialto, CA offices. 8 city workers chatting & one kinda helping me – 3 I believe were maybe park workers – it was windy out, so screw that! I was there and two guys sitting on a bench looking w/ folded plans ready to submit. I then went over to the city clerks office, 6 city workers and 1-2 citizens, including me.


  8. JimTan says:

    Another cost of these fires which will only become apparent in a couple of years is its potential economic impact on California wine sales. Napa and Sonoma produce the lions share of California wine sales. The wine country fires of this past October occurred during harvest season in both Napa and Sonoma where some wineries were known to have burned down. This raises the issue of ‘Smoke Taint’, a wine fault or defect that negatively impact the taste of a wine:

    Many of these wines are aged for a couple of years in barrels, so it will take a while to definitively determine if this has harmed the 2017 vintage of some Napa and Sonoma wines.

    • On the other hand, the scarcity of the good 2017 Napa / Sonoma wines will likely increase their value. The overall economic damage might be less.

  9. RangerOne says:

    Um isn’t this a trivial amount of money? Harvey cost over $100 billion….

    What’s 9 billion really. Not sure if the fire insured rates are better than flood insured.

    I also know most counties make an effort to pass laws to help protect homes from fire, but not sure how the effort or compliance compares to major flood zones.

    But it seems like the past couple decades has seen massive fires ? become more common.

    • curious cat says:

      Only in the U.S. with a $20 trillion debt would anyone dream of calling $9 billion trivial. How many people have to work all year to pay taxes that accumulate to $9 billion. Is that work trivial? We have become jaded beyond imagination.

  10. A lot of high end homes were destroyed. The weather pattern that causes this is no different than a hurricane, and insurers will probably change their policies, or hand the problem off to a state agency, like CEA, call it WDFE (WindDrivenFireEvent) if you want.
    Then there is the propensity for builders to design roofs with multiple sconces, small corners where embers can settle, and open eaves, which we all know is a problem. More regulation is needed.
    Now that home prices have passed the 2008 top people are living in houses they could never afford, an uninsured total loss means instant homeless.

    • Paulo says:

      I don’t know how you folks feel about your home, but if mine burned down there would not be any amount of insurance money that would make us feel better. When BC burned up this past summer my wife and I remarked this sentiment with every news broadcast.

      Of course, I’m not Elon Musk with 5 Brentwood homes on the barbie. Plus, I built my home by myself so it is a measure of my life, and not just a purchase.

      When I was a kid my neighbours house burned down and the husband was the only survivor. That day he lost 5 children and his wife. The firemen held him down when he tried to follow his wife back inside to save the kids. I witnessed the entire nightmare. I have also been a homeowner for the past 40 years and always have a charged hose line ready to go, just in case. In the winter I keep one outside tap drained and freeze-proofed….just in case.

      It isn’t about money. It is simple tragedy and the US needs to ensure victims of all natural disastors are helped, be they renters, owners, or transient. Just my opinion……. but, if there is enough money for wars, weapon purchases, and embassy moves there is enough money for disastor relief and a universal medical plan. …just sayin.

  11. Coaster Noster says:

    So, how much would it cost (will cost? would have cost?) to put distribution power lines, and some residential power lines, underground? These woodland/residential interface areas seem to be common starting points for fires that are unnoticed until they are hugely out of control. Seems like power lines are the root cause.

    • Robert says:

      That is an interesting point. When the Panama Canal was built- 100 years ago!-it was the world’s first large-scale electrification project, and in a hurricane-prone equatorial region, the American builders were wise enough to bury everything, so that when one visits what was the Canal Zone, there are no power poles to get blown down, or for that matter, to mar views of the fabulous natural beauty. How Puerto Rico must be wishing they had done the same- and if they were smart, they would, as would Cuba and everyone in the path every year. It seems expensive, but to not do so is penny-wise and pound foolish.

  12. mean chicken says:

    I was wondering if/when the excessive brush and vegetation would catch on fire again. To avoid this very hazard, I regularly clean up around my property as necessary.

    Yeah, maybe it’s nice to look at and provides habitat for small animals but it can be a real fire hazard. If done right, those nice live oak trees and orchard trees can remain, just get that tinder gathered up and composted, dead trees removed and new ones planted where possible.

  13. Michael says:

    No need to worry Californian’s can afford it, Jerry Brown said so…………

  14. Rates says:

    Great for the economy right? Broken window theory and all.

    Fire here, fire there, and pretty soon we have a brand new country.

  15. michael Engel says:

    Do I connect the dots properly :
    most Ca fires are burning middle class, or upper middle class white people areas, even when they are in different locations.

    • Wolf Richter says:

      You’re not connecting the dots correctly. The fires in the North Bay didn’t discriminate. They went from trailer parks to mansions and touched all ethnic groups.

      • alex in san jose AKA digital Detroit says:

        Rich and poor tend to be in a sort of checkerboard pattern in the US anyway, because the servants of the rich have to be able to get to work. So you have Palo Alto, and E. Palo Alto, Newport Beach and Costa Mesa, etc. The poor have to be a walk or a short bus ride away.

  16. Rates says:

    Here’s more fire:

    GDP bump plus we’ll be rebuilding this country fire by fire. Awesome.

    • Gershon says:

      Paul Krugman, house propagandist of the Keynesian fraudsters, will be a-quiver with joy at all that “broken window” rebuilding.

  17. Gershon says:

    Californians being Californians, they were woefully unprepared for any such calamities. Just as when true price discovery shows up to crash these Fed-blown Ponzi markets, the MSM will chorus as one: “No one could’ve seen this coming.”

  18. Nicko2 says:

    Maybe…just maybe building large homes out of wood on mountainsides prone to wind and bush-fires wasn’t such a great idea.

    Apparently Rupert Murdoch’s estate is burning. Nature isn’t without a sense of Karma.

Comments are closed.