JPMorgan estimates insured losses from the California wildfires could exceed $20B

A new JPMorgan analysis estimates that the total economic losses and insured losses caused by the deadly wildfires affecting Southern California may be the most expensive in the country’s history.

JPMorgan insurance analysts released a report Thursday looking at the exposure of homeowner and commercial property insurance lines due to the wildfires that have devastated communities in the Los Angeles area, including Pacific Palisades and Altadena. At least five people died in the fire and more than 2,000 homes, businesses and other structures were damaged or destroyed.

The report indicated that about 30,000 hectares were affected by the fire and about 15,000 houses and structures were considered at risk as of Thursday – up from 13,000 as of Wednesday morning. Firefighters are struggling to contain the wildfires, which are being driven by strong Santa Ana winds.

“Expected economic losses from the fire have more than doubled since yesterday to $50 billion, and we estimate that insured losses in the event could exceed $20 billion (and even more if the fire is uncontrolled),” wrote JPMorgan analysts. . “This would make this event much larger than the 2018 Butte County Camp fires, the deadliest wildfire in California history (with an estimated $10 billion in insured losses).”

CALIFORNIA WILDFIRES URGES FEDERAL TIGHTENING, STATE LAWS HINDING MITIGATION EFFORTS

“Insured losses from the Butte Camp fire were close to two-thirds of the economic loss (approximately $15 billion). The event affected 150,000 acres and affected more than 18,000 homes/structures,” the report said.

The 2018 Camp Fire destroyed the town of Paradise and several nearby communities and caused 85 deaths. A downed utility transmission line was created during a high wind event.

CALIFORNIA WILDFIRES: WHAT YOU NEED TO KNOW WHEN FILING AN INSURANCE APPLICATION

Apartments were seen on fire in the Eaton Fire in Altadena. (Jon Putman/Anadolu via Getty Images/Getty Images)

The JPMorgan report noted that the majority of damages and insured losses in the Camp Fire came from personal property losses, comprising 86% of losses compared to 12% for commercial property and 2% for all other lines and auto insurance.

The ongoing wildfires in Southern California are impacting more human centers than the Camp Fire did, and JPMorgan analysts expect insured losses to be higher as a result.

An Altadena resident leaves his burning house in the Eaton fire. (Jon Putman/Anadolu via Getty Images/Getty Images)

GET FOX BUSINESS ON THE GO BY CLICKING HERE

“While the current wildfires have not affected many acres or many homes/properties (so far), most of the damage is concentrated in the affluent Pacific Palisades area, which has high-priced homes (median home price >$3 million vs. <$500k in Butte County), " wrote analysts.

“In addition, the fires have not been contained so far and continue to spread, which means that the estimates of possible economic and insurance losses are likely to increase.”