The wildfires still burning in parts of the Palisades and Eaton areas of Los Angeles, California, have now damaged or destroyed more than 17,000 structures, with an average insured loss per structure of an estimated $1.9 million, based on the mid-point of initial insured loss estimates from catastrophe risk modellers.

As containment efforts continue for the two largest fires in LA County since the outbreak on January 7th, 2025, risk modellers CoreLogic and Moody’s RMS Event Response have released preliminary insured loss estimates.

CoreLogic’s insured loss range stands at between $35 billion and $45 billion, while Moody’s RMS pegged losses at between $20 billion and $30 billion, both of which include losses to the California FAIR Plan.

The mid-point of the $20 billion to $45 billion range is $32.5 billion, which as noted by analysts at Peel Hunt, would make the fires the worst in recent history, exceeding the $23 billion of insured losses from the peril in 2018, which was driven by the Camp Fire in Northern California’s Butte County.

According to the most recent update from the California Department of Foresty and Fire Protection, the Palisades Fire has destroyed 5,829 structures and damaged 744, and is now 56% contained, covering 23,713 acres. The Eaton Fire is more contained at 81%, covering 14,021 acres, but has destroyed 9,391 structures and damaged 1,063.

Together, the two main fires cover more than 37,000 acres, have destroyed 15,220 structures and damaged a further 1,807, meaning that a total of 17,027 structures have been damaged or destroyed by the events.

Based on the aforementioned mid-point of cat risk modeller insured loss estimates so far, and as noted by Peel Hunt in a recent note on the LA fires, this results in an average insured loss per structure of $1.9 million.

Of course, there’s a risk that losses to the insurance and reinsurance industry will increase as the two main fires are still not fully contained. Further, extreme fire weather conditions are expected for the next few days, with the National Weather Service predicting strong wind gusts and potential for rapid fire spread of both new and existing fires between noon Monday and late Tuesday evening, local time.

In response, Governor Gavin Newsom announced yesterday the mobilisation of additional personnel, engines, and aircraft to rapidly attack any new fires as continued extreme weather arrives.

In terms of the insured losses, analysts at Peel Hunt note that it is still unclear “what proportion of insured losses will be retained by insurers in the admitted market, how much exposure has been transferred to the E&S market in the past few years, and what will be picked up by the reinsurance industry.”

“Starting with the latter, reinsurers have lowered their exposure to secondary perils such as wildfires since 2022. In addition, reinsurers increased their attachment points significantly in 2023 and there was no great reduction in these attachment points in 2024 or 2025,” said Peel Hunt analysts.

Adding: “Meanwhile, regarding insurance cover, many admitted market insurers have exited the high value/wildfire-exposed homeowners market in California. This has created a significant disruption, with many policyholders seeking refuge with the insurer of last resort, the California FAIR Plan.”

Expanding on the FAIR Plan, analysts said: “The California FAIR Plan’s policy numbers ballooned in 2024, with new business increasing 41%, covering 465k policies across the state. The majority of this is domestic properties. The California FAIR plan’s exposure to Palisades is one of the largest in the State with a US$5.9bn limit (1,430 policies) and we separately estimate a c.US$1.8bn aggregate exposure to the Eaton fire (958 policies).

“The California FAIR Plan has c.US$2.5bn of reinsurance cover, leaving a net exposure of US$5.3bn. Stripping this from the midpoint of the catastrophe modelling agencies’ loss estimate leaves a private market insured loss of US$27.2bn. This is equivalent to a major Hurricane Milton type insured loss.”

“The question is then how much of the exposure has been transferred to the E&S market and therefore could be picked up by Lloyd’s. Given the fact that terms and conditions, including attachment points, can be freely set in the E&S market and pricing is unregulated would suggest that E&S insurers may be able to absorb these elevated wildfire losses and be retained within catastrophe budgets,” concluded analysts.