Insured losses from the wildfires in Los Angeles amount to billions of dollars, Reuters rating agencies say
LONDON (Reuters) – The most devastating wildfires ever for Los Angeles could cause billions of dollars in insured losses, ratings agencies said on Thursday, although many homes are likely not insured.
Forest fires burning in the Pacific Palisades, Eaton (NYSE: ), Hurst and other Los Angeles neighborhoods could result in insured losses of more than $8 billion, Morningstar DBRS analysts said in a note. That surpasses the Woolsey fire in California in 2018, which caused more than $6 billion in losses, Morningstar said.
Jasper Cooper, senior credit officer for Moody’s (NYSE: ) Ratings, expected insured losses to be in the billions of dollars given the high value of homes and commercial properties in the area.
It’s difficult for homeowners to buy insurance in disaster-prone states because several companies have pulled out of the market.
“These events will continue to have widespread, negative impacts on the nation’s broader insurance market,” said Denise Rappmund, senior analyst at Moody’s.
“Increased recovery costs are likely to increase premiums and may reduce the availability of property insurance.”
Morningstar DBRS also said a higher-than-usual share of losses could be uninsured or covered by the California FAIR plan, designed to help homeowners where standard insurance isn’t available.
JPMorgan estimated insured losses at $20 billion on Thursday, Thomson Reuters (NYSE: ) publication The Insurer reported that it doubled its estimates from a day earlier due to escalating claims.
