November 6, 2003 by Canadian Underwriter
While much of the wildfires raging through California are now under control, the US Insurance Information Institute (III) says damage could easily top US$2 billion, making these the worst fires in California history.
As of Monday, 5,980 claims had been filed as a result of the fires, with damage to more than 3,500 structures. The 1991 Oakland Hills fire caused US$1.7 billion in insured damage, damaging 2,900 homes, and was previously the worst such incident on record.
“We’re not yet done with these very unpredictable fires, which are likely to reach upwards of US$2 billion in insured losses,” says Candysse Miller, executive director of the Insurance Information Network of California (IINC) in an III press release.
But III senior vice president and economist Robert Hartwig says the catastrophic fires fall within that which the industry would have priced the risk for, and should not significantly impact rates. Nonetheless such incidents have, over the past several years, had an overall impact on homeowners’ pricing. “In fact, virtually every part of the country is now at risk for billion dollar disasters,” Hartwig notes.
The III notes that cat losses in the US for the first nine months of 2002 now stand at US$9.4 billion, more than double the amount experienced in the first three quarters of 2002. The institute expects homeowners rates in the US to jump 8% in 2004.