Featured Image Credit: Qian Weizhong/VCG via Getty Images
Topics: Los Angeles, Wildfires, California, News, US News, Money
Gerrard Kaonga
Topics: Los Angeles, Wildfires, California, News, US News, Money
The LA wildfires have been devastating but Americans can also expect a hefty financial burden when the flames are put out.
There are still fires burning across LA as firefighters attempt to get the blazes under control.
So far, the death toll is said to be 16 people while more than 10,000 homes and other structures have been destroyed.
Two of the biggest fires, Palisade and Eaton have covered more than 30,000 acres of land.
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A preliminary estimate by AccuWeather put the damage and economic losses so far between $135 billion and $150 billion.
These high financial costs could impact Americans who don’t live anywhere near California or the fires itself.
In its estimate, AccuWeather factored in a bunch of variables including damage to homes, businesses, infrastructure and vehicles, as well as immediate and long-term health care costs, lost wages and supply chain interruptions.
Jonathan Porter, the private firm’s chief meteorologist, explained: “This will be the costliest wildfire in California modern history and also very likely the costliest wildfire in U.S. modern history, because of the fires occurring in the densely populated areas around Los Angeles with some of the highest-valued real estate in the country.”
Porter added: "To put this into perspective, the total damage and economic loss from this wildfire disaster could reach nearly 4% of the annual GDP of the state of California.
“We’re in the very early stages of this disaster.”
According to JPMorgan Chase Insurance is expected to cover just $20 billion of the estimated losses meaning there is $115 billion uncovered costs.
This is suspected to be covered in federal aid, personal savings and charitable contributions.
Rising insurance premiums, reduced availability of coverage in high-risk areas, and increased federal disaster spending will affect taxpayers and policyholders nationwide.
On Jan 10 the insurance broker Aon PLC also said that the L.A. County wildfires will likely end up being the most costly in US history but they did not give an estimate of the cost.
Financial service company Moody issued a similar warning and said the reason for this is the fire have ripped through densely populated areas with higher-end properties.
“The scale and intensity of the blazes, combined with their geographic footprint, suggest a staggering price tag, both in terms of the human cost and the economic toll,” Moody’s analysts wrote.