Catastrophe risk modeling firm AIR Worldwide estimates at least $2.5 billion in insured losses from the Woolsey Fire in Southern California.
AIR said that its estimate of insured losses is based on the assumption of nearly 100 percent take-up rates. The fact that damage from fire, including wildfire, is included in standard homeowners’ policies in California informs that assumption.
Total economic losses are expected to be higher than the industry insured loss estimate. AIR Worldwide warned that industry insured losses from the Woolsey Fire could be higher than the $2.5 billion figure due to uncertainty in the payment of additional living expenses resulting from mandatory evacuations; loss of some individual structures outside of the most affected neighborhoods; and widespread but lower levels of loss due to smoke, loss of electricity and damage from suppression efforts.
AIR’s modeled insured loss estimates include insured physical damage to property—both structures and their contents—and auto, as well as direct business interruption losses. The model does not include losses to uninsured properties, land and infrastructure. Also not included in AIR’s estimate: losses from indirect and contingent business interruption; loss adjustment expenses; and the increase in costs of material, services and labor due to higher demand after a catastrophic event.
The Woolsey Fire – a vegetation fire – ignited on Nov. 8 south of Simi Valley in the southeastern corner of Ventura County and spread quickly due to Santa Ana winds and low humidity, as well as challenging suppression factors including steep terrain, limited access and extreme fire behavior.
Firefighters fully contained the blaze on Nov. 22. The cause of the Woolsey Fire is still under investigation, according to the final update issued by Los Angeles County Fire Department on Nov. 25. Overall, the Woolsey Fire burned through 96,949 acres and 1,643 structures, with another 364 structures sustaining damage.
AIR Worldwide is a Verisk-owned business.
Source: AIR Worldwide