The cleanup has not even begun because fires are still uncontained. Let’s discuss costs.
Containment of the two largest California fires are still zero percent, negative actually because they are expanding.
Yesterday, I saw reports of $10 billion in insured losses. Today it’s $20 billion and sure to rise. The uninsured losses will be much higher.
Most businesses had insurance. The average person had grossly inadequate coverage.
Containment
Please consider the CBS News California Fire Containment Report.
Palisades Fire and Eaton Fire
The two largest fires have spurred thousands of evacuations and burned thousands of acres since Tuesday. The Palisades Fire began at 10:30 a.m. local time on Tuesday, burning on the west side of Los Angeles County, including the Pacific Palisades and Malibu.
The deadly Eaton fire, which began at 6 p.m. local time Tuesday, is raging in the Angeles National Forest, Altadena and Pasadena.
179,000 Evacuation Orders
NBC has California Wildfires Live Updates
- 179,000 under evacuation orders; L.A. County sheriff says some areas look ‘like a bomb was dropped’.
- The Palisades Fire has burned through more than 17,234 acres, almost 27 square miles. It has destroyed 1,000 structures and is entirely uncontained, making it the most destructive in L.A. history.
- More than 350,000 energy customers were without power early today, including 200,000 in L.A. County, the most populous county in the country.
- Biden to California officials: ‘Spare no expense,’ feds will cover 100% of firefighting cost
- Biden sat beside Vice President Kamala Harris along with other administration officials as he explained that he immediately approved a federal disaster declaration for Los Angeles yesterday. He added that Gov. Gavin Newsom requested an increase in funding this morning, prompting Biden to cover “100% of the cost” for the next 180 days.
- “I will also make note of the fact that, sadly, many insurance companies have canceled insurance for a lot of the families who have been affected … which is only going to delay or place added burden on their ability to recover,” Harris said.
- Canada sending water bomber aircraft, helicopters to aid California. Quebec sends two water bomber planes and firefighting teams to California each fall as part of 31-year-old agreement with the U.S. state, the Canadian Broadcasting Corporation reported.
- Fire insurance claims could take years to resolve. It could take years for victims of the L.A.-area fires to resolve their insurance claims — assuming they had insurance to begin with — if past California fire events are any indication, according to one public adjusting firm.
- The insured losses from this week’s fires may exceed $20 billion, and total economic losses could reach $50 billion, according to estimates published by JPMorgan today.
Estimating Costs
NBC reported over 100,000 homes in the area were dropped from fire coverage.
Already, insured damage estimates doubled from 24 hours ago, but total damage estimates haven’t.
Given zero percent containment of the two largest largest fires, the cost of doing anything in California, and Biden’s pledge to pay (not his call to make), I expect current damage estimate will soar.
And one has to factor in lost wages, more dropped coverage, rising insurance rates everywhere as insurers scramble to cover payouts.
If insurers pay out $20 billion, the overall cost of coverage will rise by $20 billion, and insurers will leave the state.
How much in tax hikes will California seek to cover rebuilding and covering lost insurance?
What about time delays of rebuilding and lower property valuations?
Unless J.P. Morgan factored all of that in, $50 billion is a huge lowball. Yesterday I saw reports of $57 billion, but another day has passed and we are still uncontained on the two biggest fires.
In the time it took me to write this, NBC reported “A new brush fire has emerged in the Woodland Hills area of Los Angeles, near the Calabasas neighborhood, according to the Los Angeles Fire Department. The blaze has been named the Kenneth Fire. A mandatory evacuation order has been issued for residents in the area.“
On January 7, I reported 30,000 People Are Under Evacuation Orders in California Wildfire
It was a 1,200-acre fire then with 30,000 evacuation orders.
Evacuation orders now total 179,000 with still expanding acres burnt at 28,000 and rising.
Cost estimates are more than a bit premature and the price of fire insurance is about to soar (assuming you can get It at all).
Regarding insurance, Kamala Harris used the word “canceled”. I believe she means not renewed, with a 60-day notice. The state offers insurance of last resort for those who wanted some.
Live Updates Addendum
I will post live updates here.
KTLA News reports LIVE: Eaton Fire reaches the peak of Mt. Wilson
This is a live view of the Eaton Fire from Mt. Wilson in the San Gabriel Mountains.
Eaton Fire grows larger; thousands of structures damaged or destroyed
In a briefing Thursday afternoon, officials said the Eaton Fire near Pasadena and Altadena has grown to 13,960 acres and is still at 0% containment.
In addition, 4,000 to 5,000 structures have been damaged or destroyed by the fire, according to L.A. County Fire Chief Anthony Marrone.
About 1,500 people are currently working to battle the blaze.
I read that as 4,000 to 5,000 structures for just the Eaton fire. Yesterday, it was 2,000 total.
9 hours ago the fire department reported expansion of Eaton fire
“significantly stopped.”
Total acres burnt was 10,600. It is now 13,960.
Kenneth Fire
The newly sparked #KennethFire is exploding in size in West Hills, LA County, and is quickly approaching homes. The fire is moving extremely fast and a new potential spot fire just started across Highway 101.
Santa Ana winds are expected to increase up to 50 mph tonight.