News / Press

MEDIA ADVISORY: AccuWeather increases estimate of total damage and economic loss ascatastrophic wildfires in Southern California continue to ravage the Los Angeles area; updated preliminary estimate is $135-$150 billion

Published Jan 9, 2025 6:52 PM EST

AccuWeather Global Weather Center – Jan. 9, 2025 - As fires continue to rage across Southern California and the scope of catastrophic damage, loss of life, business disruptions and other economic impacts become clearer, AccuWeather has updated and increased its preliminary estimate of the total damage and economic loss to between $135 billion and $150 billion.

“These fast-moving, wind-driven infernos have created one of the costliest wildfire disasters in modern U.S. history,” AccuWeather Chief Meteorologist Jonathan Porter said. “Hurricane-force winds sent flames ripping through neighborhoods filled with multi-million-dollar homes. The devastation left behind is heartbreaking and the economic toll is staggering. To put this into perspective, the total damage and economic loss from this wildfire disaster could reach nearly 4 percent of the annual GDP of the state of California.”

As fires continue to burn and grow in size, as new information is confirmed and with the potential of new fires sparking in the coming days, AccuWeather experts say the estimate for total damage and economic loss may be revised upward, perhaps even substantially.

This update from AccuWeather experts, who are recognized experts in providing this data, accounts for new and additional information, including the damage and destruction of thousands of homes and businesses, damage to utilities and infrastructure, the financial impact of evacuation orders for more than 100,000 people, the long-term cost of rebuilding or relocation for people in densely populated areas whose homes were destroyed, anticipated cleanup and recovery costs, emergency shelter expenses, as well as immediate and long-term health care costs for people who were injured or exposed to unhealthy air quality from wildfire smoke. AccuWeather’s estimate also accounts for lost wages and housing displacement for thousands of people across Southern California whose jobs have been temporarily impacted, which may ultimately result in large numbers of furloughs, layoffs or businesses shutting down and jobs being eliminated.

“Tragically, lives have been changed forever in just a matter of minutes. Many families may not be able to afford to rebuild or repair and return. Businesses may not be able to recover and jobs will be permanently lost. Thousands of people are in desperate need of help, initially the basic and life-sustaining needs of food, water and shelter, as this tragedy unfolds. Many families will face significant unexpected costs to relocate to another area in Southern California. The recovery process will be extremely expensive and emotionally challenging in the months and years to come,” Porter said.

This wildfire disaster is expected to worsen the insurance crisis in California, as the cost for insurance coverage in high-risk areas continues to increase and more insurance companies are dropping and refusing to issue new policies. Thousands of homes and businesses that were damaged or destroyed were multi-million-dollar properties, many of which may have been underinsured or uninsured. Property owners in the area have said some major insurance carriers pulled out of fire coverage for some of the impacted areas in recent months.

“This wildfire disaster is going to be yet another major challenge for the insurance industry, and for home and business owners who are struggling to secure adequate insurance coverage in high-risk areas,” Porter said. “Families and businesses need to be able to purchase insurance at a reasonable rate, but insurance companies cannot continue absorbing huge loss after huge loss. This is a major issue that society needs to actually address in a world of increasing extreme weather impacts.”

Hurricane-force wind gusts grounded firefighting aircraft during the height of the windstorm and continue to hamper aerial firefighting efforts at times. Fires burning out of control, gusty winds and smoky conditions have also limited efforts to fully survey and assess the damage from the ground and the air.

Gusty winds and wildfire smoke will continue to impact firefighting and containment efforts through Thursday night. AccuWeather expert meteorologists say winds on Friday are not expected to be as strong as they were earlier this week during the windstorm. Wind gusts of 40-50 miles per hour are possible in some areas of Southern California on Friday.

Offshore winds are expected to pick up again Sunday in advance of another area of low pressure that will move south through California.

AccuWeather expert meteorologists say another Santa Ana wind event is possible early next week, which could lead to another extreme fire risk. AccuWeather is forecasting wind gusts of 40-60 mph starting Monday through Tuesday night, with an AccuWeather Local StormMax of 85 mph.

Porter said the wildfire disaster in Southern California is the latest multi-billion-dollar weather disaster in the United States that is straining state and federal firefighting and emergency resources.

“Many parts of the world face serious impacts and threats from our warming climate and changes to extreme weather patterns. California is on the forefront of climate change in the United States, and this tragic disaster is the latest in a devastating series of extreme weather events resulting in multi-billion-dollar disasters,” Porter said.

AccuWeather is a trusted source with recognized experts for total damage and economic loss estimates for weather disasters in the United States. In 2017, AccuWeather issued its first estimate during the catastrophic flooding from Hurricane Harvey along the Gulf Coast, which helped people in the impacted area, and across the country, understand the magnitude of the disaster.

While many rapid damage assessments only consider insured losses or far less parameters, AccuWeather total damage and economic loss estimates include among other considerations, insured and uninsured losses, damage to homes, businesses, medical facilities, infrastructure and vehicles, as well as immediate and long-term healthcare costs and excess deaths in the years following a disaster. AccuWeather total damage and economic loss estimates also account for the financial impact from power outages from utility damage and power outages from planned public safety power shutoffs during wildfire threats, which can result in business disruptions and food spoilage impacting hundreds of thousands of people.

AccuWeather incorporates independent methods to evaluate all direct and indirect impacts of the storm and is based on a variety of sources, statistics and unique techniques AccuWeather uses to estimate the damage. It includes damage to property, job and wage losses, crops, infrastructure damage, interruption of the supply chain, auxiliary business losses and flight delays. The estimate also accounts for the costs of evacuations, relocations, emergency management and the extraordinary government expenses for cleanup operations and the long-term effects on business logistics, transportation and tourism as well as the health effects and the medical and other expenses of unreported deaths and injuries, as well as the long tail of negative impacts to physical and mental health that survivors may face in the next decade.

To put this wildfire disaster into further context, the AccuWeather estimate for the total damage and economic loss from the wildfires in Maui in 2023 was $13-$16 billion. The wildfires in the western United States in 2020 was $130-$150 billion and in 2021 was $70-$90 billion. More recently, the hurricanes that impacted the U.S., including Milton, which caused $160-180 billion and Helene, which caused $225-$250 billion, and the 2024 hurricane season as a whole reached nearly a half-trillion dollars.