RMS Estimates California Wildfire Insured Losses between $9 Billion and $13 Billion

RMS recently projected that insured loss for the Camp and Woolsey wildfires in California will be between $9 billion and $13 billion ($7.5 billion to $10 billion for Camp and $1.5 billion to $3 billion for Woolsey). The estimate contemplates property and auto damage, including burn and smoke damage, business interruption, additional living expenses, and contents loss. Notably, RMS said, this fire season represents the second consecutive year with more than $10 billion in insured wildfire loss.

RMS used its forthcoming North America Wildfire High Definition (HD) Model to simulate the ignition, fire spread, ember accumulations, and smoke dispersion of the fires to determine loss estimates. The model's findings were supported by damage reports from CAL FIRE, observations from displaced residents, and information from firefighting personnel.

Fifteen fires that broke out in early November included the Camp and Woolsey events. At the time of the RMS estimate, these two fires had burned a combined total of 245,000 acres, destroyed more than 12,000 homes and businesses, and killed 80 people. The Camp fire, named for the road of its point of origin, is the most destructive fire in California history, with more than 11,000 structures burned and currently 77 fatalities, said RMS.

While the fuel landscape between the two fires differs significantly, with heavy forestry characterizing the Camp fire (Northern California) and shrubland in the Woolsey fire (Southern California), both developed under dangerous conditions that favor quick fire spread: low moisture, abnormally high temperatures, dry vegetation, and intense seasonal winds. Both traveled quickly through steep, hilly, vegetated terrain, according to RMS.

RMS reported that the town of Paradise, California, which suffered the worst losses of the Camp fire, has narrowly avoided catastrophic wildfires many times over the past 20 years. Thirteen large fires since 1999 have burned inside the current footprint of the Camp fire.

The Woolsey fire, igniting in Ventura County and jumping Highway 101 before spreading to Malibu, resulted in over 250,000 evacuations and burned more than 1,450 high-value properties, said RMS.

The area around the Woolsey fire shares a similar, if less stark, history of frequent fires, said RMS. Six large fires since 1999 intersect the Woolsey footprint. Going back to 1993, the Old Topanga wildfire, which caused almost $1 billion of loss in today's dollars, occurred immediately next to where, at the time of the RMS estimate, the Woolsey fire was still burning.

Mohsen Rahnama, RMS chief risk modeling officer, said, "Wildfire is now a major catastrophe risk that must be rigorously managed with the best data and model science. With increasing exposure due to properties near wildland areas and ongoing climate variability, insurers, policymakers, and homeowners must adapt to the prospect of more frequent and severe wildfires."

He continued, "In the wake of consecutive record-breaking wildfire seasons, we are hopeful that more focus will be placed on fire mitigation, safe construction practices, and community resilience."