California wildfires yield $845 million in losses
More than 10,000 insurance claims have been filed for property losses as a result of these two
Those numbers are likely to climb as claims are adjusted and more people file with their insurers, Jones said.
"The worst may be yet to come," Jones said, noting that wildfire season peaks in the fall. "The problem is growing. The risk is growing. The trajectory is in the wrong direction."
The news came as another major fire erupted in northern
Commissioner Jones also updated data for the dozens of fires that erupted during a windstorm last October, destroying more than 7,000 buildings in at least eight counties across
Those
Fires trigger other expensive natural disasters, he added. Residents, business owners and others have filed more than
The claims outlined Thursday underscore the unprecedented destruction
Confronted with losses, insurers are increasingly opting to not renew some policies, or are declining to write insurance policies for high-risk homes, Jones said.
He urged homeowners to do three things: Review your policy, get a preliminary estimate from your insurer of the replacement cost, then talk to a contractor to get the actual cost of replacing your home. He recommended buying insurance that exceeds the replacement cost by 25 to 50 percent , because "surge pricing" after a fire can inflate the cost to rebuild. The demand for materials and labor causes prices to go up, he said.
"Most people mistakenly believe that it will cost to replace what it cost when they bought it on the market," he said. "Often, the cost of replacement can exceed the market value of the home."
The commissioner also released a new report, "Trial by Fire: Managing Climate Risks Facing Insurers in the Golden State," which describes how climate change is a contributor to wildfire losses in
"We are simply not doing enough, fast enough to get ahead of this problem," said Jones.
The report comes in advance of next week's Global Climate Action Summit, a three-day event in
Climate change doesn't cause wildfires. But it increases the likelihood and intensity. Advances in computer modeling allow scientists to make quantitative connections between extreme weather events and climate change.
Climate change is making large wildfires more common because global warming has increased dry fuel, turning trees and grass into tinder. A 2016 study found that human-caused climate change was responsible for more than half the documented increases in fuel aridity since the 1970s and for doubling the cumulative forest fire area since 1984.
But rising damage costs are partly because of demographic shifts and development decisions that make natural disasters more destructive. The rise in population and wealth in "wildland urban interface" is contributing to much of the increase in destruction caused by wildfires. The number of buildings has ballooned in parts of the country susceptible to fires as the population in those places has also increased.
In
Climate change creates three types of vulnerability for insurers: property loss, litigation and investment declines, said
"Simultaneous and correlated economic damage can all occur together, and can compound one another, making the impact larger than any one of them alone," said Mills, who authored the "Trial By Fire" climate change report.
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