This analysis of both residential and commercial properties accounts for both fire and smoke damage as well as demand surge, debris removal, clean up and Additional Living Expenses (ALE). The majority of losses are to residential properties. Many of the potentially impacted properties are high value homes, so even moderate damage from the fires or smoke could result in costly claims
CoreLogic, a leading global property information, analytics and data-enabled solutions provider, has estimated preliminary residential and commercial loss estimates for the Eaton and Palisades Fires in Los Angeles, California to be between $35 to $45 billion.
This analysis of both residential and commercial properties accounts for both fire and smoke damage as well as demand surge, debris removal, clean up and Additional Living Expenses (ALE). The majority of losses are to residential properties. Many of the potentially impacted properties are high value homes, so even moderate damage from the fires or smoke could result in costly claims.
According to this new data analysis, ongoing losses from the Los Angeles wildfires are the basis of the facts that both fires are less than 50% contained as of Thursday afternoon.
CoreLogic will provide final insured loss estimates once the fires have been fully contained.
“The destruction caused by these fires is anticipated to be the most expensive in the state’s history with effects on the insurance industry that will persist into the future. This event highlights the paramount challenge for homeowners and the insurers that support them – the increasing density of homes and properties near the wildlife-urban-interface,” said Tom Larsen, Senior Director of CoreLogic Insurance Solutions.
“Los Angeles is a resilient community, and as they look to rebuild it will be essential to design or redesign with mitigation practices in mind, so an event of this magnitude never happens again,” said Larsen.
CoreLogic is supporting recovery efforts for people affected by the wildfires through a donation to the Red Cross, enabling them to prepare for, respond to and help people recover from these disasters, said the company.
Moody’s
Moody’s RMS Event Response has estimated insured losses for the January 2025 Los Angeles Firestorm events will likely range between US$20 billion and US$30 billion.
This preliminary estimate reflects impacts observed to date, with significant uncertainty as some of these fires are ongoing. Currently, the Palisades Fire is 31 percent contained and the Eaton Fire is 65 percent contained.
Moody’s RMS Event Response team is closely monitoring the situation and working to analyze the complexity of this event as it unfolds, to form a comprehensive view for final industry loss estimates through modeling, reconnaissance, and validation over the coming days. Moody’s RMS Event Response will issue its final insured industry loss estimate for these events after their full containment.
Mohsen Rahnama, Chief Risk Modeling Officer, Moody’s, commented: “The ongoing Los Angeles Firestorm events represent a unique and complex scenario that serves as a wakeup call for the market.
As the events have unfolded over the last couple of weeks, great uncertainty remains from numerous elements including potential insurance gaps and underinsurance given the evolving insurance landscape, high-value building and contents exposure at risk, and significant additional living expenses (ALE) resulting from the evacuation of over 100,000 people.”
“The wildfires caused extensive damage beyond property to critical infrastructure, including water systems and other utilities, with potential economic impacts that could be several multiples of insured property losses. This event will likely precipitate ongoing regulatory changes in California and accelerate usage of risk modeling to enable the insurance market to play its critical role in managing the dynamic risk landscape driven by exposure growth and climate change,” he said.
As damage assessments continue, many factors contribute to the uncertainty. These include complying with ordinance and law requirements such as local building codes that mandate seismic upgrades or modifications when rebuilding, costs associated with debris removal and soil abatement that can take months – as well as coverage and extra expenses from high-value assets such as auto, fine art, collectibles, and valuable contents from properties in affluent neighborhoods impacted by the fires, said Moody’s RMS Event Response.
Moreover, the demand for labor and materials will further escalate costs, especially if rebuilding is accelerated. Los Angeles is set to host major global sports events in the next few years, including eight matches in June 2026 for the FIFA World Cup 26™, which may force expedited rebuilding of the area’s infrastructure to support these events.
This Moody’s RMS Event Response estimate included losses from property damage, including evacuation and smoke damage, business interruption (BI), and additional living expenses (ALE) across residential, commercial, and industrial lines. Losses also consider a wide range of complex factors around reconstruction costs after the wildfires including cleanup, costs associated with permit fees, code improvements, and potential law and ordinance expenses.
The estimate also accounts for the California FAIR Plan, which has more than US$112 billion exposure, or 23 percent of its portfolio, in Los Angeles County as of September 30, 2024.