As the fires continued to rage Thursday, destroying entire neighborhoods and upending much of the film and entertainment industry, the economic toll of the disaster climbed into the tens of billions of dollars, according to analyst estimates.
The fires have quickly become the most destructive in Los Angeles history, taking aim at an already struggling insurance market.
The neighborhoods affected include the Pacific Palisades and Malibu, which are some of the most valuable real estate markets in the country, with average home values in the millions of dollars.
Analysts and forecasters are trying to estimate how much economic damage the fires could cause. The estimates vary widely and factor in the uncertainty of containment, but here is a sampling:
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AccuWeather, a company that provides weather forecasts, estimated the total damages to be as much as $57 billion, which included not just damage to physical structures but long-term health effects for residents and a slowdown in tourism.
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JP Morgan said on Thursday that expected economic losses had doubled to $50 billion from its initial estimate a day before.
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Evercore ISI estimated that the initial insurance losses could be as much as $8 billion, twice that of the fires in Maui in 2023.
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Corelogic, which tracks the “reconstruction value” of real estate markets, or the cost of rebuilding destroyed structures, said more than half of Los Angeles’s $300 billion market was at moderate risk of reconstruction.
Along with damages paid out by insurance companies, some residents may bear the financial brunt of the losses. More than 100,000 Californians lost insurance coverage from 2019 to 2024, particularly in areas most at risk of fire damage, including the Santa Monica Mountains.
The damages will test California’s new state-backed emergency insurance plan, called FAIR Plan, which has billions of dollars of exposure in the Los Angeles area and covers thousands of local home insurance policies, according to its website.
The city’s already struggling entertainment industry has canceled or postponed many of its star-studded events, including the Oscar nominations, the Critics Choice Awards and several movie premieres. Production for television shows like “Grey’s Anatomy,” “NCIS,” “The Price Is Right” and “Jimmy Kimmel Live!” have also shut indefinitely.
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