Billions in losses — where will wildfires rank among California’s costliest disasters?

Oct. 20--With damage estimates as high as $6 billion, the wildfires that ravaged wine country and parts of Sacramento Valley likely will rank among the most expensive natural disasters in California history.

The fires, which killed 42 people, figures to rank alongside the 1991 Oakland Hills Fire as the state's costliest blaze. When adjusted for price inflation, the Oakland fire caused more than $2.7 billion in damages that were covered by insurance, according to the Insurance Information Institute.

Preliminary estimates for the latest wildfires vary widely. Gov. Jerry Brown said the damages could be in the tens of billions of dollars. Risk Management Solutions Inc., an insurance consultant based in the East Bay, said this week that the economic loss would total $3 billion to $6 billion in the five hardest-hit counties: Sonoma, Napa, Solano, Lake and Mendocino, where more than 5,000 homes and other structures were destroyed. Moody's Investors Service pegged the loss to insurance companies at $4.6 billion, while California Insurance Commissioner Dave Jones released a preliminary estimate of $1.05 billion but said the final tally will almost surely be higher.

"These numbers are just the beginning of the story as one of the deadliest and costliest wildfire catastrophes in California's history," Jones said in a prepared statement. Jones said his estimate was based on claims filed so far by customers of eight major property insurers.

One thing is fairly clear. The latest fires are unlikely to eclipse the state's costliest disaster, the 1994 Northridge earthquake. When adjusted for inflation, the quake caused damages estimated at $74 billion, according to data from the Insurance Information Institute. Of that amount, around $25 billion was covered by insurance.

The 1989 Loma Prieta earthquake caused $20 billion in inflation-adjusted damage, of which about $2 billion was insured.

Why are earthquakes generally so much costlier than fires? Partly because of the damage major earthquakes can cause to freeways and other public infrastructure.

There's also the issue of geography. Christopher Hackett of the Property Casualty Insurers Association of America said most wildfires rage through remote areas, while even a moderate earthquake can destroy scores of major buildings and homes in densely packed urban areas. (The devastation from the wildfires in Santa Rosa was an obvious exception).

Hackett said getting an accurate reading of the financial cost of the latest wildfires will take some time. "It's still early and there are still some wildfires burning," he said.

RMS said its estimate of $3 billion to $6 billion doesn't include crop losses, which could send the final tally considerably higher. Although much of the wine grape crop had already been harvested when the fires started, wine experts said the grapes still on the vines consisted mostly of the priciest grapes harvested in California: cabernet sauvignon.

The RMS estimate also doesn't include the fires in Yuba, Butte and Nevada counties, where more than 600 structures burned.

Some of the economic damage could be difficult to calculate. The wine country fires have temporarily crippled Napa and Sonoma's $3.2 billion-a-year tourism industry, although many wineries have reopened and many are sponsoring fundraisers to benefit fire victims.

Dale Kasler: 916-321-1066, @dakasler

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