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? AccuWeather estimates the LA blaze will far exceed the $16 billion in economic losses from Maui’s wildfires two years ago. Weather-related catastrophes now make up almost all of the $320 billion in global damages last year, with geophysical events like earthquakes only amounting to 7% of that figure.

The deadly inferno sweeping across Los Angeles and consuming some of the city’s most affluent homes will likely be one of the most expensive natural disasters on record.

An initial estimate by AccuWeather forecasts damages will reach a minimum of $52 billion, and potentially top out at $57 billion. This would place it in the top ten catastrophes by property losses otherwise dominated chiefly by hurricanes like this summer’s Helene, which cost $250 billion.

“This is already one of the worst wildfires in California history,” said chief meteorologist Jonathan Porter.

Should a large number of additional structures be burned in the coming days, he warned it may become the worst wildfire on state record, based on the number of structures burned and the economic loss.

“This is a terrible disaster. We’re just starting to get a clear look at the magnitude of the destruction and loss,” Porter added.

'Just complete and utter devastation'

By comparison the wildfire that captured headlines the world over by incinerating parts of Hawaii’s Maui island in 2023 topped out at $16 billion.

A chief cause of AccuWeather’s high estimate is the value of the underlying property set ablaze. According to Zillow, the average price of a home in the badly hit Pacific Palisades area is estimated at approximately $3.5 million.

Beyond the sheer economic impact, the fires have also claimed at least five lives, according to California’s Gavin Newsom, with likely more to be reported in the coming days.

On hand to assess the situation personally, the governor was struck by “just [the] complete and utter devastation” left behind in the fire’s wake.

Roughly $300 billion in annual damages just from extreme weather

While climate change sceptics continue to assert the conflagration could have been avoided through better forest management and controlled burning, a multinational corporation whose profits depend on how accurate they model property risks warned there is a clear trend.

“The destructive forces of climate change are becoming increasingly evident,” said Munich Re’s Thomas Blunck. He runs the world’s largest reinsurance business by premiums, which underwrites risks for primary providers like Allstate and Nationwide.

On Thursday, Blunck’s company issued its annual statement estimating the amount of property damage caused by natural disasters worldwide soared by nearly a fifth in 2024.

Munich Re’s message was simple: weather was to blame for almost all of it. And severe thunderstorms and wildfires were fueling the trend in rising losses more so than major disasters like tropical cyclones.

By comparison, geophysical events like earthquakes made up just 7% of this year’s $320 billion in losses. The previous year, when natural catastrophe damages hit $268 billion in today’s dollars, these non-weather related phenomena still accounted for roughly a quarter.

Frequency and scale of property damages causing insurance rates to soar

Whether it was the flash flooding in the desert oasis of Dubai, the torrents of mud sweeping cars through the streets of Spain’s Valencia, or the destruction wreaked by the twin hurricanes of Milton and Helene in the Gulf—climate change can be ignored, but the extreme effects of climate change cannot.

“Societies need to prepare for more severe weather catastrohpes,” Blunck warned bluntly. “Accordingly, Munich Re is expanding and adapting its risk models to address these developments.”

Put simply, bills are set to go up. So while homeowners are free to believe climate change is a hoax, when it comes to their property they’ll find the companies selling them insurance most definitely do not.

For example, Allstate hiked rates in California by 34% in November after receiving earlier approval from state regulators.

That is assuming they can even find a provider willing to cover them. In some hard-hit states like Florida, many homeowners are forced to resort on a state-backed insurers of last resort such as the Citizens Property Insurance.