Destroyed homes and cars are shown, Sunday, Aug. 13, 2023, in Lahaina, Hawaii. Hawaii officials urge tourists to avoid traveling to Maui as many hotels prepare to house evacuees and first responders on the island where a wildfire demolished a historic town and killed dozens. Photo: Rick Bowmer/AP
It will be some time before the full extent of the devastation done in areas of Maui, Hawaii by wildfires that ignited August 8, is fully known, but some across the insurance and financial industry have already released analysis on how much of a hit they believe insurers may take from this disaster. While the estimates vary, they all have one common conclusion: Insured losses from the fires are likely to surpass $1 billion.
Karen Clark & Company
Using their U.S. Wildfire Reference Model, Karen Clark & Company (KCC) estimates insured property losses from the Lahaina fire will be around $3.2 billion. They report more than 2,200 structures existed within the Lahaina fire perimeter, with over 3,000 total buildings affected, including secondary impacts like branding and smoke damage.
In addition to factors of drought and winds from passing Hurricane Dora, KCC also attributes the fires' rapid spread in Lahaina to the high proportion of wood frame and older construction buildings in the town.
CoreLogic
When it comes to structures vulnerable to the fires, CoreLogic estimates there were 3,088 residential home with $1.3 billion in total reconstruction cost within three preliminary wildfire perimeters on Maui:
- Lahaina: 2,808 residential properties with a reconstruction value of $1,127,048,435.
- Pulehu: 275 residential properties with a reconstruction value $146, 627,816.
- Pukalani: 5 residential properties with a reconstruction value $4,212,390
It's important to note that not all structures within these areas sustained damage, and not all of those that were damaged sustained a 100% loss.
Moody's Investors Service
Combining estimates from the Pacific Disaster Center and FEMA that 2,207 structures were damaged or destroyed and 2,719 structures were exposed in the Lahaina fire with the town's average single-family home value of $1.5 million, Moody's estimates insured losses will reach at least $1 billion.
In addition to damage to homes and commercial property, Moody expects insurers will also face losses for personal watercraft and vehicles.
Of course, how much a carrier is affected depends on how much business they write in Hawaii. According to Moody's, the homeowners insurers with the most direct premiums written in Hawaii are State Farm ($162 million), First Insurance Company of Hawaii ($44 million), Allstate ($37 million), USAA ($33 million) and Liberty Mutual ($28 million).
The insurers with the most commercial property direct written premiums in the state are First Insurance Company of Hawaii ($74 million), Heritage Insurance ($57 million), AIG ($51 million), Allianz ($47 million) and DB Insurance ($44 million).
Brittney Meredith-Miller
Brittney Meredith-Miller is senior editor of PropertyCasualty360.com. She can be reached at [email protected].