Farmers Estimates $600M in Losses from LA Wildfires

Farmers said on Wednesday that it expects losses from the Los Angeles wildfires last month to reach an estimated $600 million.

Insurance companies have so far paid out more than $6.9 billion for losses from the biggest two of the Los Angeles-area wildfires that swept through the region and destroyed tens of thousands of homes in January, according to the latest figures from the California Department of Insurance.

Data from insurers released by the CDI show 33,717 claims have been filed for home, business, living expenses and other disaster-related expenses. The data show 5,597 auto insurance claims have been filed for $73 million.

Several large insurers have reported losses in excess of $1 billion.

Mercury Insurance Group reported last week it expects gross losses from the wildfires to be in the $1.6 billion–$2.0 billion range. Travelers Companies Inc. announced it will lose an estimated $1.7 billion from last month’s wildfires. USAA, Chubb, Allstate and State Farm are other big carriers to have reported $1 billion or more in losses from the fires.

The California FAIR Plan reported it paid more than $914 million to policyholders affected by the fires, prompting the insurer of last resort to go to the state’s insurance commissioner for a $1 billion assessment on admitted market insurers to cover the claims.

The Farmers estimate is a net of the per occurrence reinsurance program and gross of tax, it excludes the Farmers share of FAIR Plan losses and roughly $250 million reinstatement premium payment.

The Farmers Exchanges (Farmers Insurance Exchange, Fire Insurance Exchange and Truck Insurance Exchange) “focused approach to overseeing” its portfolio in California, a strong capital base and a comprehensive reinsurance program positioned the company to effectively manage this event, Farmers said in a statement.

“With deep roots in Southern California, the Farmers Exchanges remain dedicated to supporting the recovery process for all their customers, employees and communities impacted by the devastating fires,” the statement reads. “The Exchanges also want to reaffirm their previously announced commitment to expand coverage options in California.”

Total economic losses from the fires in January could range from $95 billion to $164 billion, according to a report from UCLA.

Top photo: 2024 Pacific Palisades Fire. Source: CalFire.