Insured Losses from Camp Wildfire Estimated Between $6B-$9B: AIR Worldwide

Catastrophe risk modeling firm AIR Worldwide estimates that industry insured losses from the Camp Fire in Northern California will be between $6 billion and $9 billion. Taken together with the Woolsey fire in Southern California, AIR estimates that industry insured losses from these two California fires will be between $9 billion and $13 billion. Note that AIR’s estimate of insured losses are based on the assumption of nearly 100% take-up rates. AIR Worldwide is a Verisk business.

Source: AIR Worldwide | Published on December 6, 2018

Ca property insurance reforms

The Camp Fire surpassed previous records to become both the deadliest and the most destructive single wildfire in California history. This vegetation fire ignited on November 8 near Camp Creek Road in Butte County and spread quickly due to low humidity, strong winds, and dry fuels. Just days after ignition, a representative from the International Association of Fire Fighters said, “[the town of] Paradise was literally wiped off the map.” Full containment was achieved on November 25.

To date, the Camp Fire has burned 153,336 acres and destroyed more than 18,700 structures: 13,696 single-family homes, 276 multi-family homes, 528 commercial structures, and 4,293 other structures. In addition, 564 structures were damaged: 462 single-family homes and 102 commercial structures. Field damage inspection is still ongoing.

Loss estimates were derived utilizing the AIR Wildfire Model for the United States and are based on exposures as of the end of 2017.

The fact that damage from fire, including wildfire, is included in standard homeowners’ policies in California informs the assumption of nearly 100% take-up rates. The range of loss estimates is based on the modeled loss within the burn scar and reflects uncertainty in the payment of additional living expenses resulting from mandatory evacuations, loss of some individual structures outside of the most affected neighborhoods, extra expense and ordinance losses, as well as loss due to smoke, loss of electricity, and damage from suppression efforts.

AIR’s modeled insured loss estimates for the Camp Fire includes:
• Insured physical damage to property (residential, mobile home, and commercial), both structures and their contents, and auto
• Direct business interruption losses
• Demand surge—the estimated increase in costs of materials, services, and labor due to increased demand following a catastrophic event

AIR's modeled insured loss estimates for the Camp Fire does not include:
• Losses to uninsured properties
• Losses to land
• Losses to infrastructure
• Losses from indirect and contingent business interruption
• Loss adjustment expenses

About AIR Worldwide

AIR Worldwide (AIR) provides risk modeling solutions that make individuals, businesses, and society more resilient to extreme events. In 1987, AIR Worldwide founded the catastrophe modeling industry and today models the risk from natural catastrophes, terrorism, pandemics, casualty catastrophes, and cyber incidents. Insurance, reinsurance, financial, corporate, and government clients rely on AIR’s advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, longevity modeling, site-specific engineering analyses, and agricultural risk management. AIR Worldwide, a Verisk business, is headquartered in Boston, with additional offices in North America, Europe, and Asia. For more information, please visit