About $9B in Insured Losses After Three California Wildfires

Three of last month’s California wildfires will cost insurers about $9.05 billion, according to preliminary information from state regulators.

That figure is based on initial claims that insurers have received from the Camp, Woolsey and Hill fires, California Insurance Commissioner Dave Jones said on a conference call Wednesday. The number is likely to rise over time as more people get access to their neighborhoods and additional claims are processed, he said.

Residents and their insurers have been coping with heightened risk of wildfires in recent years. The Camp and Woolsey fires killed 89 people and destroyed more than 20,000 structures, according to the California Department of Forestry and Fire Protection. Last year’s blazes resulted in nearly $12 billion in statewide insurance claims, the commissioner said in January.

The causes of the Camp, Woolsey and Hill fires remain under investigation.

State investigators are probing whether electrical equipment owned by PG&E Corp. sparked Northern California’s Camp Fire, the deadliest and most destructive in state history. Edison International’s Southern California Edison is evaluating whether a power failure near the start of the Woolsey Fire last month was related to contact between wires. Authorities haven’t said power lines are suspected as the cause of the Hill Fire in Ventura County.

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Some insurers have disclosed expected losses tied to the fires, including Chubb Ltd. The company said it expects $225 million in fourth-quarter net losses before taxes related to the blazes.

Allstate paid customers affected by the Camp and Woolsey Fires gross insurance payments of over $1.2 billion, despite reducing California policies by approximately 50 percent within the past decade.

Allstate estimated net losses in November related to the Camp and Woolsey Fires at $670 million, pre-tax ($529 million, after-tax).

“It’s time to address the impact that more severe weather is having on Americans instead of fighting about climate change,” said Tom Wilson, chairman, president and chief executive officer of The Allstate Corporation. “This year there have been approximately 7,500 wildfires in California, Hurricanes Florence and Michael and a swath of severe weather across the United States, putting our customers in danger and at risk of losing their homes and hard-earned money. We are grateful for the support of first responders and government officials in dealing with these events. It is now time to come up with longer term solutions, such as ensuring power lines are properly maintained, homes have natural fire barriers and building codes reflect increased severe weather,” concluded Wilson.