New Report Finds Total Damage, Economic Losses From The L.A. Wildfires approximately $275 Billion

According to a new report by Accuweather, the total damage and economic loss stemming from the 2025 Southern California wildfires was raised to between $250 billion and $275 billion on Monday, with insurers expected now to see at least $30 billion in reported losses alone.

Since January 7th, Los Angeles County has been devastated by several wildfires blazing in different areas of the county. This includes the Palisades Fire, which is currently at around 23,700 acres and has resulted in 8 deaths, over 105,000 evacuated, and 5,300 destroyed structures; and the Eaton Fire, which is currently over 14,100 acres and has caused 16 deaths, 100,000 evacuated, and roughly 7,000 destroyed structures. The Palisades fire is also currently at about 17% containment, with Eaton at about 35% containment.

Initial estimates by Accuweather and JP Morgan last week showed much more optimistic figures, with insurers expected to see around $20 billion in losses and total economic losses ranging between $50 billion and $60 billion. However, the worsening conditions, as well as the fire spreading into some of the most expensive zip codes in the entire country, including Malibu, Pacific Palisades, Santa Monica, Altadena, and Pasadena, quickly caused the figures to rise. By the weekend, damage cost predictions were at $135 billion.

This led to Monday, when Accuweather raised the total damage and economic loss from the fires to between $250 billion and $275 billion. Of this, insurers are now expected to see at least $30 billion in reported losses, with at least another $10 billion for uninsured losses. Adding to this is the Palisades Fire currently heading towards other areas of Malibu and L.A. neighborhoods such as Brentwood and Westwood, and the Eaton Fire moving towards other neighborhoods in the San Gabriel mountains, meaning that both of those totals are expected to climb even further up this week.

The new figures now makes the Palisades and Eaton fires the most expensive in U.S. history, dwarfing other previous insured loss totals such as the $12.5 billion lost during the 2018 Camp Fire in Northern California and the $13 billion to $16 billion lost during the 2023 Maui wildfires. While the death total is still nowhere near the state fire record of 86 deaths, which occurred during the Camp Fire in the town of Paradise, the economic loss is staggering.

“This is already one of the worst wildfires in California history,” said AccuWeather Chief Meteorologist Jonathan Porter on Monday. “Should a large number of additional structures be burned in the coming days, it may become the worst wildfire in modern California history based on the number of structures burned and economic loss.”

Hundreds of billions in losses

Home losses alone are expected to raise the total in coming days, since median home prices in all the affected areas are well over $1 million. In places like Malibu, the median cost is $2.3 million. Even with so many homeowners going without insurance, insurance companies are expected to go deep into the red in losses, similar to how insurance companies lost over $3 billion from paying out claims associated with the Maui wildfires.

For many, the numbers seem unbelievable, and could get worse.

“When you start throwing around figures like $275 billion, it is really hard to imagine that kind of loss,” explained insurance consultant Bradley Lord to the Globe Tuesday. But look at what the fires did. Most businesses in the Palisades and Altadena were wiped out. Malibu, very Northern Pasadena, other areas of L.A too. You had a lot of shutdowns so far as precautions, and we’ll likely see many areas blocked off in the weeks or even months ahead. And then add in all those home losses and property losses. These tens of thousands of people are now snapping up the few open rentals and homes for sale, driving those prices up. And then there are so many ancillary losses too.

“So that $250 billion to $275 billion estimate may seem like a huge figure to throw out there, but once you add everything up, it makes a lot of sense.

“Going forward to 2025, 2026, 2027. L.A. is going to see a construction boom like they haven’t seen since the post-war era. Every construction and contractor firm in the area is going to be hired. There is going to be a hiring spree, as well as a huge training spree as a lot of people will be going into this. Outside of construction, there will be a lot of environmental engineers figuring out how to build to reduce wildfire risk. And that’s just a few areas.

“But that’s getting ahead. Recovery is going to take years. And for insurance companies, after this, they are going to be even less keen on insuring in the state going forward. That’s for sure.”

Revised total economic and damage loss estimates for the fires are expected later this week.