(LOS ANGELES) — Multiple fires raging across the Los Angeles area will cost insurers as much as $30 billion, Wells Fargo and Goldman Sachs estimated in a report released this week.
After accounting for non-insured damages, the total costs will balloon to $40 billion, the report said.
The ongoing fires, according to analysts, “appear to already be the costliest wildfire event in California history.”
The forecast would make the fires one of the 20 costliest natural disasters in U.S. history, when calculated as a share of the nation’s gross domestic product, analysts added.
The wildfires have left a path of wreckage in their wake. More than 12,000 homes and other structures have burned down in the fire, the California Department of Forestry and Fire Protection said.
At least 24 people have died and more than a dozen others remain unaccounted for as multiple wildfires, fueled by severe drought conditions and strong winds, continue to burn.
Thousands of firefighters are battling wildfires across 45 square miles of Los Angeles County. About 92,000 people remain under mandatory evacuation orders and another 89,000 are under evacuation warnings.
A rise in high-cost natural disasters has strained insurers and helped send home insurance premiums nationwide soaring, experts previously told ABC News. Plus, a recent bout of acute inflation has made homebuilding and repairs more expensive, they noted, exacerbating the cost crunch for insurers.
Industry unrest roiling the insurance market in California demonstrates the role climate change has played in skyrocketing premiums and struggling insurers, some experts said.
The average home insurance price jumped a staggering 43% in California from January 2018 to December 2023, S&P Global found last year.
Over recent years, many insurers have reduced coverage or stopped offering it altogether in California as wildfire risks have grown. With more frequent and intense wildfires, insurers face the prospect of more claims and higher costs.
While wildfires are a natural and necessary part of Earth’s cycle, climate change and other more direct human influences have increased their likelihood. Climate change is making naturally occurring events more intense and more frequent, research shows.
Los Angeles residents and homes remain under threat from the wildfires.
A “particularly dangerous situation” with a red flag warning will go into effect in western Los Angeles County and most of Ventura County on Tuesday, weather officials said, with winds threatening to further fuel historic Southern California wildfires.
ABC News’ Kevin Shalvey, David Brennan, Emily Shapiro, Meredith Deliso, Max Golembo, Matthew Glasser and Julia Jacobo contributed to this report.
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