Ongoing California wildfires are likely to result in billions of dollars in insured losses following damage to commercial and residential properties, Moody’s Investors Service Inc. said in a report Wednesday.
Some commercial property insurers are also likely to pay business interruption claims, and the increased demand for construction labor and materials after the wildfires has the potential to push insured losses higher, Moody’s said.
Policyholders will face increased rates and non-renewals as severe wildfires are likely to continue, driven partly by climate change, Moody’s said.
As of Aug. 25, almost 1,800 residential and commercial properties had been damaged or destroyed by the wildfires, which have resulted in more than 1.5 million acres burned and at least seven fatalities, according to the California Department of Forestry and Fire Protection and other authorities.
Insured losses are around $1.5 billion so far, based on an average value of $826,000 per structure, Moody’s said.
However, there is considerable variability around this estimate because of the wide range of values for homes and commercial properties in the affected areas,…
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