Los Angeles Wildfires To Shatter Disaster Records With Up to $45 Billion in Insured Losses

The devastating fires in Los Angeles are on track to shatter prior records for total losses, according to a new analysis from CoreLogic.

Estimated insured losses from the Palisades and Eaton fires in Los Angeles currently range from $35 billion to $45 billion, said Tom Larson, senior director of insurance solutions at CoreLogic, at a virtual briefing event on Thursday.

That would make the recent fires by far the largest wildfire insurance industry loss event in history, exceeding the $11.5 billion in insured losses in the 2018 Camp Fire in Northern California.

The CoreLogic estimate covers both residential and commercial properties, although the vast majority of claims are expected to be for damaged homes. The total loss estimate includes coverage for homes and their contents, other permanent structures, additional living expenses, and business interruption.

CoreLogic, which uses satellite imagery, ground survey teams, and public data to generate loss estimates, projects that nearly 20,000 structures worth a cumulative $50 billion will be impacted in some way by the fires, ranging from minor smoke damage to utter destruction.

Of the impacted structures, the real estate analytics firm projects more than 12,500, worth a cumulative $30 billion, will show significant damage.

However, Larson noted that while firefighters have made significant gains in containing the fires, the battle to protect lives and property still continues, making any loss projections preliminary.

It’s also unclear how many of the impacted homes were uninsured, or insured for fire damage only through California’s bare-bones insurer of last resort, the state-operated FAIR plan.

“There are a lot of uncertainties in this loss estimate,” said Larson. “We’ve done our best forecast looking at the past, but again, there’s some uncertainty.”

Extreme weather conditions fueled infernos

Thomas Jeffrey, CoreLogic’s chief wildfire scientist, explained that an unprecedented set of extreme weather conditions converged to fuel the Palisades and Eaton wildfires, as well as a series of other nearby fires that were contained before causing major damage or loss of life.

After two years of heavy rains, Southern California experienced a severe drought in the latter half of 2024. Since July, downtown Los Angeles has recorded only a fifth of an inch of rain, its second-driest period in almost 150 years of record-keeping.

Last year was also the hottest summer in the city in 130 years. The unusually hot, dry conditions continued into early January, when they combined with powerful Santa Ana winds, which gusted up to 100 mph as the wildfires raced down from the hills above Pacific Palisades and Altadena, the two areas most heavily impacted.

“We’ve never met all four of those factors (sustained high winds, low humidity, drought conditions, high temperatures) in the United States in January. This is the first time that we’ve ever seen that,” said Jeffrey.

“When you have hurricane-force winds, you will have large embers. Large embers are a problem because they start fires much easier, as they drop out and fall into areas that start burning again with a new fire that has to be addressed,” he added.

CoreLogic exec shares his own harrowing brush with fires

During the briefing, Garret Gray, president of CoreLogic Insurance Solutions, shared his own experience of evacuating his home during the Palisades fire.

“My story is a little—it’s something that shakes me every time I tell it,” said Gray.

Gray was working at his office in L.A. when he received frantic text messages from his children’s school warning that they had to be picked up due to an evacuation order.

“I had somebody who was a little closer than I was go down to try to grab my kids from school, and when they got there, it was filled with smoke. The campus was on fire. The kids had already been moved multiple times into safer locations as the fire progressed onto campus. As I got closer, the gridlock and the panic got a bit stronger,” he recalled.

Unable to proceed by car due to the traffic gridlock, Gray parked and ran toward the school on foot, with homes destroyed by fire lining both sides of the street.

“A very scary situation. Lots of panicked people who were trying to get out. People were honking frantically. And as you know, a lot of people ended up abandoning their cars and running,” he said.

Fortunately, he was able to reunite safely with his kids and evacuate the area. And although his home was near the source of the fire and received heavy smoke damage, it was spared from major structural damage.

Using insights from his professional life, Gray cleared out a significant amount of vegetation surrounding the home, including cutting down several trees, after purchasing it in 2021.

“It’s very clear to me that if that tree was still existing, it would most likely have ignited. And then, it’s so close to the house that the house would probably have not been able to survive that,” he said. “So mitigation efforts work.”

Realtor.com is partnering with the REALTORS® Relief Foundation to raise funds to support victims of the January 2025 Southern California wildfires. The foundation provides urgent housing-related assistance to homeowners affected by disasters.