California wildfires: insured losses could top $30B, Wells Fargo analysis finds

It devastating forest fires The storms that hit Southern California over the past week could have insured losses in excess of $30 billion, according to a new analysis.

At least 24 people have died, mostly in wildfires Los Angeles areawhile officials say at least 12,000 buildings have been damaged or destroyed by the fires.

Financial analysts at Wells Fargo Securities issued a report to clients on Sunday saying their “base case” for insured losses from the wildfires was $30 billion, adding that total losses could fall in the $20 billion to $40 billion range. :

Of that total, about 85% of losses are expected to be homeowner’s insurance policies, while 13.5% are commercial property and 1.5% are personal auto losses, Wells Fargo’s analysis found. : The main case noted that the average value of property in areas affected by wildfires hovers around $3 million.

CALIFORNIA Fires. IMPORTANT NUMBERS FOR LOS ANGELES COUNTY RESIDENTS AND HOW YOU CAN HELP THEM

An aerial view shows destroyed homes as the Palisades Fire continues to burn on January 9, 2025 in Pacific Palisades, California. (Mario Tama/Getty Images/Getty Images)

“Regardless of the outcome, we see this as a manageable event for insurers,” the statement said Wells Fargo analysts wrote: They noted that for a total insured loss of $40 billion, this would represent a 2% loss on equity for insurers.

According to the $30 billion base case insured lossesOf that, $25.5 billion would come from homeowner’s insurance policies versus $4.05 billion from commercial lines and $450 million from auto insurance policies, giving the stock a smaller hit of 1.6%.

last week JPMorgan analysts released an initial estimate of $20 billion in insured losses, making the Southern California wildfires the deadliest in the state’s history, as well as an estimate by Wells Fargo of $30 billion.

MAPS SHOW WILDFIRES DESTRUCTION, DESTROYED HOMES

Chimneys stand amid rubble after the Palisades Fire broke out on January 8, 2025 in Pacific Palisades, California. (AGUSTIN PAULLIER/AFP via Getty Images/Getty Images)

Either estimate would make this month’s wildfires the costliest in California history, surpassing the 2018 Camp Fire, which caused nearly $10 billion in insured losses.

The Camp Fire hit the Northern California town of Paradise and several surrounding communities, killing 85 and damaging more than 18,000 buildings.

CALIFORNIA BANNED CANCELLATION OF INSURANCE, NOT RECHARGEMENT IN FIRE-DAMAGED COUNTY.

Khaled Fouad (L) and Mimi Lane (R) inspect the property of a family member that was destroyed by the Eaton Fire on January 9, 2025 in Altadena, California. (Justin Sullivan/Getty Images/Getty Images)

The composition of insured losses from the Camp Fire detailed by JPMorgan was similar when compared to the ongoing Southern California wildfires analyzed by Wells Fargo.

The JPMorgan report noted that personal property losses accounted for about 86% of losses, compared to 12% for commercial property and 2% for all other lines and auto insurance.It added that because Southern California Fires affect larger settlements, resulting in higher insured losses.

CREATE A FOX BUSINESS WITH A QUICK CLICK HERE!