Potential Losses of California Fire Insurance Predicted to Reach Rp 323 Trillion
JAKARTA – A devastating forest fire in the Los Angeles area of California, United States, is predicted to become one of the costliest natural disasters on record. Reports indicate a high potential for massive losses that insurance companies will have to bear. The estimated insured losses currently range from eight billion US dollars to 20 billion US dollars (approximately Rp 129 trillion to Rp 323 trillion), according to a report by ClaimsJournal on Friday (10/1/2025). Morningstar DBRS Research has provided an early estimate that total insured losses could exceed eight billion US dollars, depending on the final number of properties impacted by the forest fire. The National Weather Service in the US has raised its economic loss estimate to 135 billion US dollars to 150 billion US dollars from the initial estimate of 52 billion US dollars to 57 billion US dollars.
Director of disaster response for the property intelligence firm CoreLogic, Jon Schneyer, expressed that he would not be surprised to see insured losses rise to 10 billion US dollars. He referred to the 2018 Southern California wildfires that burned 18,804 structures and resulted in losses of around 10 billion US dollars at that time. “The ongoing fire is occurring in an area with several properties worth one million US dollars, and 10 billion US dollars is a decent baseline figure to work with,” Jon said.
Global insurance data analytics provider, Verisk, estimated that the insured risk for the upscale Pacific Palisades area could reach 15 billion US dollars. Verisk noted that this figure represents an estimate of the value of properties that could be damaged by fires in Palisades. Meanwhile, The Wall Street Journal reported that insured losses for all fires could cost insurance companies as much as 20 billion US dollars. Without specifying the insured loss amount, atmospheric scientist for modeling firm Karen Clark & Company, Dan Ward, predicted that the Palisades fires would make history. “In our view, the Palisades fire is likely to be the most damaging forest fire in Southern California history and possibly the most damaging in US history,” Ward stated.
### Expert Predictions and Estimates
Experts in the insurance industry and disaster response have provided various predictions and estimates regarding the potential losses resulting from the California forest fires. The significant insured loss figures underscore the magnitude of the economic impact of these devastating wildfires.
### Impact on Insurance Companies
The projected insured losses are expected to have a substantial impact on insurance companies, potentially reaching billions of dollars. These companies will need to assess and manage the risks associated with the California fires to mitigate their financial exposure and ensure the stability of the insurance market.
### Historical Context and Lessons Learned
The comparison to past wildfires, such as the 2018 Southern California fires, highlights the recurring threat and severity of wildfires in the region. The insights gained from previous disasters can inform future disaster response efforts and risk mitigation strategies to better protect communities and properties in high-risk fire zones.
