More Than $30 Million in Losses Expected From Los Angeles Fire

The Station Fire in Los Angeles County, Calif., has burned more than 225 square miles as of Sept. 3 and remains largely uncontrolled.

Business information provider First American Spatial Solutions said property losses from the Station Fire are more than $30 million. However, more than $200 million in residential value has been exposed to the fire, First American added. Risk modelers have reported about 12,000 homes located below the fire in the San Gabriel Mountains remained threatened.

"The fire has destroyed 64 homes thus far," said Sam Sorich, president of the Association of California Insurance Companies. "Considering how many acres this fire has burned, the insured losses do not look to be major. The areas burning are a lot of forest -- areas without insured homes. But insurers are ready because these things can change in a hurry."

Allstate spokesman Peter DeMarco said it is too soon to tell the cost of the fire to the insurer. Similar to other companies such as State Farm, Farmers and Mercury Insurance, Allstate sent claims adjusters and mobile claims units to the scene.

According to the California Department of Forestry and Fire Protection, the Station Fire, which started Aug. 26, was 38% contained on Sept. 3.

Another blaze, the Auburn Fire northeast of Sacramento, struck a more concentrated area of homes starting Aug. 27, State Farm spokesman Bob Devereux said. Here, State Farm said it has received 32 claims, of which 10 claims are complete losses. Farmers said they received 90 claims from the Station and Auburn fires, as well as the Oak Glen fire (BestWire, Sept. 2, 2009).

A recent A.M. Best Co. special report said that, although it was not as severe as the 2007 season, the 2008 wildfire season caused $640 million in direct property loss from three wildfires in the Los Angeles area last November. The report said insurance rates have gone up in California due to fires and more frequent activity could have more of an effect on businesses, who are faced with higher costs for liability coverage (BestWire, July 13, 2009).

The top five writers of homeowners multiperil in California in 2008, according to A.M. Best Co. state/line product information based on direct premiums written, were: State Farm Group, with a 20.3% market share; Farmers Insurance Group, with 17.3%; Allstate Insurance Group, with 11.4%; California State Auto Group, with 6.6%; and Liberty Mutual Insurance Cos., with 5.0%.