LA Wildfires Cause $1.9M Average Insured Loss Per Structure, Over 17,000 Properties Impacted

The devastating wildfires in Los Angeles County, particularly in the Palisades and Eaton areas, have damaged or destroyed over 17,000 structures since their outbreak on January 7, 2025. The average insured loss per structure is estimated at $1.9 million, with preliminary total insured loss estimates ranging between $20 billion and $45 billion, according to catastrophe risk modeling firms CoreLogic and Moody’s RMS. The mid-point estimate of $32.5 billion would make this disaster the most expensive wildfire event in U.S. history, surpassing the 2018 Camp Fire’s $23 billion in losses.

The Palisades Fire, now 56% contained, has burned 23,713 acres, damaging or destroying 6,573 structures. The Eaton Fire, at 81% containment, has covered 14,021 acres and damaged or destroyed 10,454 structures. However, with strong winds and extreme fire weather conditions forecasted, further destruction and increased insured losses remain a risk. Governor Gavin Newsom has mobilized additional personnel and resources to address potential new outbreaks.

California’s insurance market continues to grapple with the aftermath of these wildfires. Many traditional insurers have reduced exposure to wildfire-prone areas, forcing policyholders to rely on the California FAIR Plan, the state’s insurer of last resort. The FAIR Plan faces significant exposure, with $5.3 billion in net losses across the two fires, despite carrying $2.5 billion in reinsurance coverage. Additionally, analysts are closely watching how much of the losses may shift to the Excess & Surplus (E&S) market, which has higher flexibility in pricing and policy terms.

This event underscores the ongoing challenges of insuring wildfire-prone areas, where increasing loss severity is reshaping how insurers, reinsurers, and state plans manage risk.