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California wildfires: $12.4 billion in insured losses and growing

By Paul Rodgers

San Jose Mercury News

Wildfires that devastated California last year caused at least $12.4 billion in insured losses, the state’s insurance commissioner announced Monday.

Of that total, $11.4 billion came from three fires — and represents a jump of 25 percent from the initial loss estimate last month.

All three occurred in November: The Camp Fire, which destroyed most of the town of Paradise in Butte County, killing 89 people and leveling 18,804 buildings, and the Woolsey and Hill fires, which killed 3 people and destroyed 1,643 structures in Los Angeles and Ventura counties.

“These are unprecedented numbers,” said Ricardo Lara, who was sworn in as California’s insurance commissioner earlier this month.

In December, the department estimated $9.1 billion in insured losses from the three big November fires.

Lara said at a news conference Monday that he does not know yet what the total losses — insured and uninsured — statewide are for all the 2018 fires in California. Cal Fire officials are still tallying that number, he said.

But Cal Fire spokesman Scott McLean said Monday afternoon that Cal Fire does not compile those statistics.

The numbers are expected to go higher. On Jan. 8, the German-based insurance company Munich Re estimated total losses from the Camp Fire alone at $16.5 billion and said that $12.5 billion of that was insured.

The company also said that the fire in Paradise was the most expensive natural disaster in the world in 2016.

Company officials blamed climate change in part for the dry, dangerous conditions that sparked fires so late the year.

“Such massive wildfires appear to be occurring more frequently as a result of climate change,” said Munich Re Board member Torsten Jeworrek. “Action is urgently needed on building codes and land use to help prevent losses. Given the greater frequency of unusual loss events and the possible links between them, insurers need to examine whether the events of 2018 were already on their models’ radar or whether they need to realign their risk management and underwriting strategies.”

So far, insurance companies have paid $6.3 billion in claims statewide from the 2018 fires, Lara said Monday.

State insurance workers have been in the burned communities from the beginning, he added, noting they have helped people with claims and have worked to reduce fraud from non-licensed contractors pitching rebuilding contracts.

The $12.4 billion in statewide insured losses is comprised of the largest fires of 2018, insurance department staff members said.

Those are the three November fires, along with two major fires in July: the Carr Fire near Redding, which killed 8 people and destroyed 1,604 buildings, and the Mendocino-Complex Fire, which burned 459,123 acres — making it the largest fire in California history — in Mendocino, Lake, Colusa and Glenn counties, mostly in remote areas, killing 1 firefighter and destroying 280 buildings over a two-month period.

New California Gov. Gavin Newsom announced earlier this month $305 million in new funding as part of his first state budget to expand the state’s ability to fight wildfires and better alert residents of impending disasters.

That includes include money for: retrofitting Blackhawk helicopters and C-130 airplanes acquired from the Air Force to use in firefighting; creating five new California Conservation Corps crews to thin forests and create fuel breaks; funding 13 new engines to place in fire-prone areas; providing more money for communications systems to warn the public, particularly seniors and others when evacuations are needed; and setting up 100 infrared cameras, positioned in high-risk areas of the state, to spot fires early.

With Gov. Jay Inslee of Washington and Kate Brown of Oregon, Newsom also sent a letter to President Trump earlier this month asking for the federal government to double its funding for fire prevention efforts in national forests in the three states. More than half of all forest land in California is federally owned, and funding for thinning and controlled burn projects to reduce fire risks in those areas has been cut by the Trump administration, Newsom noted, even as Trump has criticized California for not doing more.

Lara noted Monday that the federal government shutdown over the past month has also slowed efforts to reduce fire risk next summer and fall because U.S. Forest Service employees were furloughed at a time when damp conditions allow for controlled burns to thin dead trees.

“The shutdown did not help,” he said. “Crews who should be doing the prescribed burns now were not working.”



Source: Orange County Register

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