L.A. wildfires broke record for costliest in the history of the planet

San Francisco Chronicle​

18-07-2025

The Eaton and Palisades fires in Los Angeles are now the costliest set of wildfires in global history, according to a new insurance industry report.
Gallagher Re, a global reinsurance firm, estimates that the January fires caused economic losses of $65 billion, including $40 billion of insured damage. That makes the two blazes the 'costliest individual wildfire events ever recorded for the (re)insurance industry,' according to the report released Wednesday.
Reinsurance firms provide insurance to insurance companies in order to handle the costs of major catastrophes, such as large wildfires, and closely track the costs of such events.
Measured by structures destroyed — which includes homes as businesses as well as barns and sheds — the Eaton and Palisades fires are the second and third most destructive fires in state history, respectively, according to Cal Fire. Their massive scale of devastation is only outpaced by the 2018 Camp Fire, which destroyed more than 18,800 structures in and around the community of Paradise (Butte County).
The Eaton Fire, which killed 18 people, is also the fifth deadliest wildfire in California. The Palisades Fire is the ninth deadliest, with 12 deaths.
Though previous fires have burned more structures, the Palisades and Eaton fires uniquely ripped through scores of highly expensive homes.
Data from the California Department of Insurance shows that insurance companies, including the California FAIR Plan, have paid out $17.1 billion to customers as of May 12.
That number is likely to get much higher as clean up continues and residents return to rebuild. But it's already far outpaced the previous record for costliest wildfire years in California history — 2017 and 2018, when historic fires seasons cost about $12 billion a year in insured losses.
The Los Angeles fires prompted renewed attention to the insurance industry and led to scores of lawsuits that accuse insurance companies of illegally colluding to drive up prices and purposefully underinsuring clients. Insurance companies have largely declined to comment on the litigation; industry representatives have refuted such allegations, pointing instead to market forces and a lack of homeowner knowledge. Last month, the California Department of Insurance launched an investigation into State Farm General's claims practices; the insurer said investigators will find it's helped thousands of people to recover. The department also launched a task force to create the first-ever statewide standards for smoke claims in response to homeowners' complaints that insurance companies are denying coverage for testing and proper cleanup of homes sullied by smoke but not burned.
California wildfire losses for 2025 could rise further as the state's traditional fire season kicks off.
All of that might seem to complicate California officials' efforts to tame the state's ongoing insurance crisis, which first kicked off after the massive blazes of 2017 and 2018.
But so far, no insurance company has announced plans to exit the state, stop writing policies or drop existing customers en masse, said Deputy Insurance Commissioner Michael Soller. That's a big departure from historic wildfires of the past, which have prompted insurers like State Farm and Allstate to cut back on their presence in the state and even drove one smaller insurer out of business.
Instead, many insurers seem to be waiting for a set of reforms spearheaded by Insurance Commissioner Ricardo Lara set to take full effect this summer. These reforms are widely expected to lead to increased insurance prices, but regulators promise they'll also persuade more insurance companies to write policies in high-fire-risk areas.
'We're still on track for what we expected before these fires,' Soller said.