Wildfires that broke out in Los Angeles County this week are currently ongoing and are expected to cause extensive damage. These wildfires are predicted to become one of the most expensive natural disasters in U.S. history.
The fires have resulted in the deaths of at least 11 individuals and have destroyed over 12,000 structures since Tuesday. Entire neighborhoods that once housed luxury homes have been completely destroyed by the raging flames.
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Although it is still too early to determine the exact financial impact of the wildfires, initial assessments suggest that these fires may surpass previous natural disasters in terms of monetary losses in the United States.
A preliminary estimate by AccuWeather put the damage and economic losses so far between $135 billion and $150 billion. By comparison, AccuWeather estimated the damage and economic losses caused by Hurricane Helene, which tore across six southeastern states last fall, at $225 billion to $250 billion.
“This will be the costliest wildfire in California modern history and also very likely the costliest wildfire in U.S. modern history, because of the fires occurring in the densely populated areas around Los Angeles with some of the highest-valued real estate in the country,” said Jonathan Porter, the private firm’s chief meteorologist.
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AccuWeather factors in a multitude of variables in its estimates, including damage to homes, businesses, infrastructure and vehicles, as well as immediate and long-term health care costs, lost wages and supply chain interruptions.
The insurance broker Aon PLC also said Friday that the L.A. County wildfires will likely end up being the costliest in U.S. history, although it did not issue an estimate. Aon ranks a wildfire known as the Camp Fire in Paradise, California, in 2018 as the costliest in U.S. history up to now at $12.5 billion, adjusted for inflation. The Camp Fire killed 85 people and destroyed about 11,000 homes.
The L.A. County wildfires, which were fueled by hurricane-force Santa Ana winds and an extreme drought, remained largely uncontained Saturday. That means the final tally of losses from the blazes is likely to increase, perhaps substantially.
“To put this into perspective, the total damage and economic loss from this wildfire disaster could reach nearly 4% of the annual GDP of the state of California,” AccuWeather’s Porter said.
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In a report Friday, Moody’s also concluded that the wildfires would prove to be the costliest in U.S. history, specifically because they have ripped through densely populated areas with higher-end properties.
While the state is no stranger to major wildfires, they have generally been concentrated in inland areas that are not densely populated. That’s led to less destruction per acre, and in damage to less expensive homes, Moody’s noted.
That’s far from the case this time, with one of the largest conflagrations destroying thousands of properties across the Pacific Palisades and Malibu, home to many Hollywood stars and executives with multimillion-dollar properties. Already, numerous celebrities have lost homes to the fires.
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“The scale and intensity of the blazes, combined with their geographic footprint, suggest a staggering price tag, both in terms of the human cost and the economic toll,” Moody’s analysts wrote. The report did not include a preliminary cost estimate of the wildfire damage.
It could be several months before a concrete tally of the financial losses from the wildfires will be possible.
“We’re in the very early stages of this disaster,” Porter said.
Take a look at the latest stories and videos on the devastating Southern California wildfires here.
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