Los Angeles Wildfires: Death Toll Rises as Crews Battle Heavy Winds

The death toll from the ongoing wildfires in Los Angeles County continues to rise as firefighters face heavy winds and extreme conditions in their efforts to save homes and landmarks. As of today, at least 11 people have lost their lives, and more than 12,000 structures have been destroyed, with the financial impact estimated to be among the costliest natural disasters in U.S. history.



The devastating blazes, fueled by hurricane-force Santa Ana winds and an extreme drought, have laid waste to entire neighborhoods once home to multimillion-dollar properties. While it's still too early for an accurate tally of the financial toll, preliminary estimates suggest that the losses so far could make the wildfires the costliest ever in the U.S., according to various estimates.

AccuWeather, the weather forecasting service, has put the damage and economic losses so far between $135 billion and $150 billion. By comparison, AccuWeather estimated the damage and economic losses caused by Hurricane Helene, which tore across six southeastern states last fall, at $225 billion to $250 billion.

"The fires moving through Los Angeles County highlight the intensifying risk that wildfires pose to significant areas of the State of California," said Denise Rappmund, senior analyst at Moody's Ratings. "It is too early to evaluate potential impacts to property valuations or other credit implications for individual local governments. However, these events will continue to have widespread, negative impacts for the state’s broader insurance market — increased recovery costs will likely drive up premiums and may reduce property insurance availability."

As the fires continue to rage, the final tally of losses from the blazes is likely to increase, perhaps substantially. The insurance broker Aon PLC has also said that the L.A. County wildfires will likely end up being the costliest in U.S. history, although it did not issue an estimate. Aon ranks a wildfire known as the Camp Fire in Paradise, California, in 2018 as the costliest in U.S. history up to now at $12.5 billion, adjusted for inflation.

The L.A. County wildfires, which remain largely uncontained, have already destroyed thousands of properties across the Pacific Palisades and Malibu, home to many Hollywood stars and executives with multimillion-dollar properties. Numerous celebrities have lost homes to the fires, and the scale and intensity of the blazes suggest a staggering price tag, both in terms of the human cost and the economic toll.

It could be several months before a concrete tally of the financial losses from the wildfires will be possible. In the meantime, President Joe Biden has announced that the federal government will cover 100% of costs for the initial disaster response to the Los Angeles wildfires for the next 180 days. The president also directed the Pentagon to provide any firefighting resources the area needs, including helicopters to help suppress the flames.

As the situation continues to unfold, the long-term economic consequences of the wildfires on the Los Angeles area's tourism and real estate industries are likely to be significant. The destruction of popular tourist destinations and high-value properties may lead to a decrease in tourism, as visitors may avoid the region due to safety concerns and the loss of popular attractions. Additionally, the real estate industry may face a decrease in property values in the affected areas, as well as a decrease in the overall housing supply, which could drive up prices in unaffected areas.

The insurance industry is also likely to be significantly impacted by the wildfires, with insurance companies facing billions of dollars in claims. This could lead to an increase in insurance premiums and a decrease in the availability of insurance coverage in the affected areas, as insurance companies become hesitant to provide coverage in high-risk areas. The insurance industry has already been struggling with the increasing risk of wildfires in California, and the wildfires in Los Angeles County are likely to exacerbate this trend.

In conclusion, the ongoing wildfires in Los Angeles County have already caused billions in damage and forced mass evacuations, exposing critical gaps in climate resilience. As the situation continues to unfold, the long-term economic consequences of the wildfires on the Los Angeles area's tourism and real estate industries, as well as the insurance industry, are likely to be significant. The insurance market and regulatory environment in California may also be influenced by the wildfires, with potential impacts on insurance premiums, availability, and regulatory measures.