Fast-moving wildfires ripped through Los Angeles on Wednesday, forcing 100,000 people to evacuate as flames devastated wealthy neighborhoods and iconic landmarks, killed five people, and destroyed more than 1,000 structures in what experts warn could be the breaking point for California’s fragile insurance market.
Four major blazes remained uncontained, including a new fire that erupted near the Hollywood Bowl, threatening the tourist-packed area around the Hollywood Walk of Fame. The fires have consumed about 42 square miles (108 square kilometers), nearly the size of San Francisco.
The Palisades Fire, the most destructive in modern Los Angeles history, leveled entire blocks in the affluent Pacific coast neighborhood, damaging celebrity homes and reducing local businesses to rubble. Hollywood stars including Mandy Moore, Cary Elwes, and Paris Hilton reported losing their homes.
Insurance experts say the timing couldn’t be worse for California’s teetering insurance market. The state’s FAIR Plan, the insurer of last resort, has seen its total insured value triple to $458 billion since 2020, with nearly $6 billion concentrated in Pacific Palisades alone.
“This is sort of what everybody’s been preparing for,” said Karl Susman, an insurance broker in West Los Angeles. “This is why rates are going up. This is why carriers are freaking out.”
AccuWeather estimated damages at $52-57 billion, with potential to rise as high winds continue. The disaster comes weeks after Insurance Commissioner Ricardo Lara implemented new rules allowing companies to pass along reinsurance costs to customers in exchange for maintaining coverage in high-risk areas.
Hurricane-force winds up to 80 mph (129 kph) on Tuesday night drove embers for miles, overwhelming firefighters’ efforts. The National Weather Service predicted continued gusts of 35-55 mph through Friday.
“We were not stopping that fire last night,” said Pasadena Fire Chief Chad Augustin, whose city lost between 200-500 structures to the Eaton Fire. “Those erratic wind gusts were throwing embers for multiple miles ahead of the fire.”
President Joe Biden signed a federal emergency declaration after meeting with Governor Gavin Newsom at a Santa Monica fire station. National Guard troops have been deployed to assist.
Two arrests were made for looting in evacuation zones, prompting Los Angeles County Sheriff Robert Luna to warn that perpetrators would face prosecution.
Climate change has extended California’s fire season, with rising temperatures and decreased rainfall creating dangerous conditions. The region has not received more than 0.1 inches (0.25 centimeters) of rain since early May.
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