As insurers began to cope with claims from burned out homeowners, fires continued to rage in Southern California consuming houses, businesses and acreage in one of the worst wildfires to hit the state in years.

The Insurance Information Institute said its very preliminary estimate of insured damages is that they will exceed $500 million–a figure including not only damaged and destroyed homes, but payments for additional living expenses and losses to businesses.

“The Southern California wildfires continue to spread rapidly under the influence of the powerful Santa Ana winds,” said Neena Saith, catastrophe response analyst at Risk Management Solutions, a catastrophe modeling firm.

She said weather forecasts for the next 24 hours “remain conducive to explosive fire spread, so the damage could be very severe unless the fires are quickly contained.”

However, containment remains difficult. A report from state officials on the Southern Wildfires released early this morning said close to 300,000 acres were aflame and most fires were far from being contained. Only two fires, Roca in Riverside County and Sedgewick in Santa Barbara, Calif., were 100 percent contained.

The worst, the Witch fire in San Diego, covered 145,000 acres and threatened 6,800 homes, businesses and other structures. More than 500 homes have been destroyed, along with 100 commercial structures and 50 other buildings. RMS put the figure at more than 700 homes and businesses.

Early today 15 fires throughout the Southern portion of the state threatened more than 71,500 homes, businesses and other structures and had destroyed at least 751 homes and 102 commercial buildings, and an additional 81 other structures.

According to news reports, more than 346,000 homes in San Diego were ordered evacuated. The fires stretch from Los Angeles south to San Diego.

Insurers have yet to get a firm handle on the number of claims, though they are handling calls.

A spokesman for AIR Worldwide, the catastrophe modeler subsidiary for Jersey City, N.J.-based Insurance Services Office, said the firm is still collecting data and no loss data is available at this time.

At Novato, Calif.-based Fireman's Fund Erron Al-Amin, head of marketing for personal insurance, said the fire is moving so rapidly “that it's hard to talk about assessing it.”

She said the company has people in the field looking at damage and providing services that customers need such as counseling, referrals for legal help and financial planning–the kind of support the company learned clients needed after Hurricane Katrina.

The company has set up a hotline for customers and agents (800-456-3108) to help with finding transport and temporary housing, she said.

The national director of the risk management program for Fireman's Fund personal insurance, Gary Raphael, said some insurers with offices in the San Diego area have suffered business disruptions due to evacuations.

The fire has been compared to the wildfires in October 2003 where 15 wildfires struck the region. The worst, the Cedar Fire in San Diego burnt over 270,000 acres and damaged more than 4,900 properties causing around $1.1 billion in insured losses, Ms. Saith noted.

However, Mr. Raphael said, “with the scope and scale of this fire, it is difficult to get your hands around it and put it in a historical context.”

Special Reports /

California Fires Continue Onslaught

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