LA wildfires among costliest in US history
Published On Jan 9, 2025, 1:32 PM
The recent wildfires in Los Angeles are expected to be among the most costly in U.S. history, with estimated losses ranging from $52 billion to $57 billion. Nearly 2,000 structures have been damaged, and over 200,000 residents are under evacuation orders. The insurance industry faces significant challenges as analysts predict insured losses exceeding $8 billion. These unforeseen events may lead to increased insurance premiums, reduced property insurance availability, and long-term impacts on property values and public finances.
Stock Forecasts
AIG
Negative
The high costs associated with the wildfires will likely lead to a surge in insurance premium rates and more individuals seeking coverage through state-run plans, which typically provide less protection at a higher cost. This environment could negatively impact the profitability of insurance companies involved in property insurance.
DHI
Positive
Investors in home improvement and construction companies like D.R. Horton might see increased demand for rebuilding efforts in fire-affected areas, which can provide growth opportunities in the medium- to long-term as the area recovers.
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