Skip to content

31 thoughts on “LA fires now estimated to cost $250 billion”

  1. D_Ohrk_E1

    I assume, as what happened w/ the Lahaina fire, there will be multiple parties involved in lawsuits with everyone suing everyone and everyone pointing the finger.

    And like Lahaina, the governor will convene an independent body to investigate and report their findings. It'll include reps from the state, the feds from several departments, fire fighting specialists, and Underwriters Laboratories. Perhaps a consulting building code official and an independent fire marshal from outside the county.

    It will end up implicating multiple parties for different faults. And most of the public will completely miss the critical issue, and cost, of climate change, as will the report.

    1. Art Eclectic

      Insurers will try evade payouts until someone Mangiones one of them, which starts a major stock market correction.

      Odds of an insurance industry meltdown now 100%.

      1. Batchman

        Insurers will try evade payouts until someone Mangiones one of them ...

        I don't think Chuck would appreciate this addition to the vocabulary.

    2. golack

      Sad but true....

      One electrical utility company report problems on their line around the time one of the fires started.

      Of course, no power, no pumping stations in that area. Underground lines will help with fires, but not sure how easily they could be repaired after an earthquake or landslide.

      And all of that is making a mountain out of a molehill. Global warming making extremes more common and people moving into wild land areas, with building codes written mainly for keeping property values high. (or so it seems)

      The Paradise fire should have been more of a wake up call. But only insurance companies were listening, and many left the state. Building better, or maybe leave some places alone, are options now. Not sure how to retrofit existing buildings.

      Note: this is has nothing to do with "liberal policies".

      1. Art Eclectic

        Also consider that SCE would need to replace all their lines and the Gas Co lines as well. All those bare hillsides are a major slide hazard when the rains finally come.

        I predict there will be little to no rebuild in these areas.

        1. Joseph Harbin

          After Bel Air burned in 1961, they rebuilt.
          After Mandeville Canyon burned in 1979, they rebuilt.

          The desire to rebuild in some of the world's most desirable real estate is tremendous. Maybe not for you and me, but for people who can afford it.

          (I live close enough but am happy to be among the hoi polloi in overpriced homes on undersized lots.)

          I would like to see money and investment flow into developing new building materials. Why can't we build houses that are more resistant to fires like this and strong and flexible enough to hold up through earthquakes?

          2. lawnorder

            Houses can be built with steel frames, which are at least as earthquake resistant as wood frames, and noncombustible roofing and wall sheathing. Windows can have shutters. Air intakes can have spark suppressors built into them, although it beats me why people allow their houses to suck in air when there's a fire outside.

            Steel is a much better conductor of heat than wood, which means extra attention needs to be paid to insulation if you want to control the temperature inside the building. All of this costs money

            1. James B. Shearer

              "... All of this costs money"

              On June 12, 2024 a .377 acre vacant lot in Altadena sold for $780,000. See here . Suppose you could now buy the lot for $500,000. That would leave an extra $280,000 for better fireproofing.

        2. James B. Shearer

          "I predict there will be little to no rebuild in these areas."

          History says otherwise. The Oakland Berkeley Hills fire in 1991 destroyed thousands of homes but people rebuilt. Often with bigger fancier houses. See here:

          "The sheer number of fires over the decades means there is a pattern to recovery. It will be years before the sections of Los Angeles County that burned will return to a normal state. But they will, and when they do, the communities will be better than ever. Paradise, the Butte County town where 86 people died in the 2017 Camp Fire, was the fastest-growing city in 2024, according to the California Department of Finance. People are returning in droves. Three decades after my neighborhood burned, it is again filled with houses (mostly stucco with metal roofs to make them fire-resistant), green trees and flowering plants. The only signs of the 1991 catastrophe are a few lots with no houses, only foundations."

          1. Art Eclectic

            I know "this time is different" is a tired trope, but insurance will drive a bunch of the rebuild decisions. Ability of utilities to respond is different, they're all strapped for resources. Maybe some will be rebuilt, but it will be under very different economic headwinds and likely to multifamily and not SF.

      2. PaulDavisThe1st

        > with building codes written mainly for keeping property values high

        Not sure what this is supposed to me. Building (relatively) fireproof houses in the urban/wildland interface and beyond is expensive. No way around that, really. So you either get cheap/affordable construction that burns like a matchstick or you get less affordable/expensive housing that has some improved chance for survivial.

    1. tigersharktoo

      And it likely the Palisades fire origin point was in the Santa Monica Mountains National Recreation Area. And the Eaton fire may have its origin point in the Angeles National Forest. Key word: NATIONAL

    2. MF

      It is not clear to me why this should be a national level expense instead of state level.

      National level should be for infrastructure and equipment that it is not cost effective to build and purchase at the state level.

      States should determine how much of a financial hit they can handle in the event of a disaster and buy insurance for the remainder.

      The more you socialize the costs of living in natural disaster prone areas without adequate prevention and preparation, the more people will do it.

      Most of the costs should be borne by individuals and localities and if that makes it uneconomic to live in some places that is a GOOD result.

      1. Joseph Harbin

        "The more you socialize the costs of living in natural disaster prone areas..."

        That sounds like Mike Johnson of Louisiana (of all places!) saying "conditions" need to be placed on aid to California. Conditions for thee, but not for me.

        Paul Krugman likes to say the government is "an insurance company with an army." The purpose of insurance is exactly to spread the costs of losses so that people can recover when disasters occur. Otherwise, people will never recover.

        Californians pay when the Mississippi floods, when tornados take out towns in Appalachia, when hurricanes wreak havoc through the South year after year. When fires hit California, it's time for the rest of the country to pitch in and help. On balance (and per capita), the rest of the country gets a better end of the deal by having California part of the pool. We contribute far more to the fed budget than we get back.

        1. MF

          For insurance to work it has to be priced based on risk. Governments usually find that politically impossible.

          We need to price people out of places that are too likely to suffer natural disasters, not subsidize their foolishness.

  3. Joseph Harbin

    - Home insurance is California comes in two kinds of policies: (a) homeowners (includes fire), and (b) earthquake. Earthquakes are extraordinary events and expensive. But not nearly as expensive as fires now. I don't know how fire continues to be part of regular insurance going forward. Some big changes needed.

    - $250 billion in losses should make the fires the most expensive disaster in US history.

    - It's bigger than Jeff Bezos's net worth! (Well ahead still in the #1 guy, who's apparently now bidding to buy TikTok.)

    - Losses from Trump 2.0 will no doubt be even larger!

    1. Art Eclectic

      I think no one will ever get full replacement coverage ever again. People will get only as much coverage as the bank needs to be made whole.

      1. Joseph Harbin

        Standard homeowner policies cover fire and wildfires, but not acts of God (flooding, earthquakes).

        California declared a 12-month moratorium on insurance cancelations, but I can't imagine many insurers will stay in the state unless huge changes made.

    1. DButch

      The RE crisis has been going on for quite a while in Florida and the hurricane prone areas. I think CA is starting to see the same problems.

      The Seattle Times reprinted an interesting article from the NYT this past Sunday. Some experts are rethinking approaches to fire prevention - it's not just a problem at the interface between housing/businesses and "the wild edge". The fires around LA were being pushed by high winds house to house. One observation was that in some areas houses were completely razed while tree canopies were barely touched.

      That really does indicate (as some others here have noted) that we really need to rethink how we build as well as where we build.

      1. PaulDavisThe1st

        I see an analogy here with the training we actually do as firefighters.

        Especially for volunteer firefighters, but to some extent for career FF's too, the vast majority of the time you put in is spent training for events that are (you hope) quite unlikely to happen.

        Building houses that could survive a santa-ana-sped fire might be impossible, but aiming at a slightly more achievable goal is going to be similar: you are going to spend a bunch of time and money targetted at something that is unlikely to happen.

        However, if/when it does, the difference between "we made the investment in readiness" is dramatic. That's as true for houses as it is for invididual FF's and their teams.

        1. DButch

          I saw a picture of a house that seemed unscathed in the middle of one of the devastation areas. It had xeriscaped open space around the house, poured concrete "fencing", abbreviated eaves, and a very simple peaked metal roof. Those last two reduced places for burning debris to pile up and also reduced eddy currents throwing burning debris against walls. The homeowner also created firebreaks by leaving gates open - apparently fire can travel down a fence line, although maybe that's less of a risk if your fence is concrete.

  6. Traveller

    I am getting lots of push back on my travel place...so I told them to put on their big boy pants and try to learn something, (this does not apply here...I'm just a little irritated by all the work I have to do over there).

    Be that as it may, to quote myself:

    Lots of houses survived...even in the blazing center of the fire...please read the following excellent article from Bloomberg at the provided link...new code standards, a clearer understanding of the New Forces being impelled by Climate Change, and a realization that standards were different under largely Republican leadership 50~75 years ago when most of this construction was done. There you have it, all you need to know!

    https://www.bloomberg.com/news/articles/2025-01-13/los-angeles-wildfires-why-these-homes-didn-t-burn?utm_source=website&utm_medium=share&utm_campaign=copy

    Best Wishes, Traveller

  7. ronp

    as mentioned above stucco and steel roofs will be what the rich homeowners (and a few middle class people and commercial property owners) will rebuild with.

    the flying embers spread is real and building less flammable structures will result in saving properties the next time there is a wind driven inferno.

Comments are closed.