While insurers estimate the financial toll at $30 billion, the overall damage might reach as high as $250 billion.
In this aerial view, captured from a helicopter, a lone blue van stands intact among charred ruins during the Palisades Fire near Los Angeles’ Pacific Palisades neighborhood on January 9, 2025. Photo: Getty Images
The wildfires tearing through Southern California have wreaked havoc across the Los Angeles metropolitan area, reducing entire communities to ash and forcing residents to seek refuge elsewhere in the state.
Now, Wells Fargo and Goldman Sachs have placed a staggering cost on the destruction: $30 billion.
According to ABC, that’s the estimated financial hit insurers are expected to absorb from the infernos ravaging the region. With fires still active, however, the final cost remains uncertain. A joint report from the two financial firms suggests that including uninsured losses could push the total to $40 billion.
The report notes that the fires are likely “the costliest wildfire event in California history.”
If these estimates hold true, ABC says the fires would rank among the top 20 most expensive natural disasters in U.S. history.
Meanwhile, AccuWeather has released a far higher estimate. Last week, the weather forecasting company projected “total damage and economic loss” from the disaster at $250 billion to $275 billion. Their chief meteorologist has called it “one of the costliest wildfire disasters in modern U.S. history.”
Unfortunately, the crisis is far from over. Wildfires continue to flare up, posing ongoing threats. According to the California Department of Forestry and Fire Protection (Cal Fire), the Palisades Fire near the Pacific Palisades has consumed 23,448 acres and is 72% contained. The Eaton Fire near Altadena has scorched 14,021 acres and is 95% contained, while the newly ignited Sepulveda Fire by the Getty Center has burned 45 acres and is 60% contained. Fires have also erupted in Riverside, Oxnard, and Castaic Lake, extending the devastation beyond the Los Angeles basin.
Cal Fire reports that the Palisades Fire has damaged or destroyed over 7,000 structures and claimed 11 lives, while the Eaton Fire has destroyed or damaged more than 10,000 structures and resulted in 17 fatalities.
In addition, a recent report from the city of Los Angeles estimates $350 million in damage to public infrastructure, according to the Los Angeles Times.
Wildfires are an ongoing challenge in California, prompting insurers to raise premiums—or refuse coverage entirely—in high-risk areas. NPR notes similar challenges in states like Florida and Louisiana, where hurricanes and flooding have disrupted insurance markets.
Experts warn that climate change, which is expected to increase the frequency and intensity of natural disasters, may render the current insurance model unsustainable. Carolyn Kousky from the Environmental Defense Fund told NPR, “Insurance is the one area where many Americans are already feeling the economic impact of climate change. It’s become a kitchen table issue—a tangible way people are grappling with its consequences.”
