California wildfires report losses of $ 845 million

Residents and business owners have filed more than $ 845 million in insurance claims following the Carr and Mendocino complex fires this summer, the first data on what could be a massive bill following a series fires that hit the state this year.

More than 10,000 insurance claims were filed following two fires in northern California, which damaged or destroyed more than 8,800 homes, 329 businesses and more than 800 cars, commercial vehicles and other private property . Commissioner Dave Jones said Thursday morning.

These numbers are likely to increase as claims are adjusted and more people file with their insurers, Jones said.

"The worst is perhaps yet to come," said Jones, noting that the forest fire season peaks in the fall. "The problem is getting worse. The risk increases. The trajectory is in the wrong direction.

The news came while another major fire had erupted in northern California. The Delta fire, north of Redding in Trinity National Forest, has reached 15,000 acres and threatens hundreds of structures.

Commissioner Jones also updated data on the dozens of fires that erupted during a storm last October, destroying more than 7,000 buildings in at least eight counties in northern California, resulting in a total loss of $ 10.4 billion.

These Sonoma and Napa fires have become the most expensive fires in US history in terms of insured losses, with Sonoma and Napa owners suffering $ 7.9 billion and $ 1.5 billion in damages, respectively. of dollars. This $ 9.4 billion in claims from both counties represents a slight increase over the $ 9 billion reported last December. The 1991 fire at Oakland Hills had already held this title, with insured losses of $ 1.7 billion.

The fires trigger other costly natural disasters, he added. Residents, business owners and others have filed more than $ 736 million in insurance claims following the Montecito landslide in January, which destroyed more than 152 homes and 11 businesses. said Jones.

The claims outlined Thursday underscore the unprecedented destruction that California has endured over the past two years, Jones said.

In the face of losses, insurers are increasingly choosing not to renew certain policies or refuse to buy insurance policies for high-risk homes, Jones said.

He urged homeowners to do three things: Examine your policy, get a preliminary estimate of the cost of replacing your insurer, then talk to a contractor to get the real cost of replacing your home. He recommended buying insurance that exceeds the replacement cost by 25-50%, as a "surtax" after a fire can inflate the cost of rebuilding. The demand for materials and labor is driving up prices, he said.

"Most people mistakenly believe it will cost to replace what it cost when they bought it on the market," he said. "Often, the cost of replacement may exceed the market value of the home."

The Commissioner also released a new report entitled "Trial by Fire: Managing Climate Risk for Insurers in the Golden State", which describes how climate change is contributing to losses from forest fires in California.

"We just do not do enough, fast enough to get ahead of this problem," Jones said.

The report comes ahead of next week's World Summit on Climate Action, a three-day event in San Francisco that will bring together leaders from around the world to celebrate the achievements of states, regions and cities. on track to achieve the goals of the historic Paris Agreement.

Climate change does not cause forest fires. But this increases the probability and the intensity. Advances in computer modeling allow scientists to establish quantitative links between extreme weather events and climate change.

Climate change is making large forest fires more frequent, as global warming has increased dry fuel, turning trees and grasses into almonds. A 2016 study found that human-induced climate change accounted for more than half of the documented increases in fuel aridity since the 1970s and a doubling of the area of ​​cumulative forest fires since 1984.

But the increase in damage costs is partly due to demographic changes and development decisions that make natural disasters more destructive. People turn on the vast majority of fires, compared to those caused by natural processes such as lightning.

In addition, since most people-initiated fires occur near homes, these fires are usually the most expensive. Increasing population and wealth in the "urban interface of wilderness areas", with an increasing number of buildings in fire-prone areas of the state, is contributing to rising costs.

In California, 3.6 million of the 8 to 9 million state units are located in this potentially dangerous "urban interface".

Climate change creates three types of vulnerability for insurers: property losses, litigation and investments are declining, said Evan Mills of Energy Associates, a California-based consulting firm specializing in energy and environmental environment and the California Insurance Department.