California wildfires: Insured losses could top $30B, Wells Fargo analysis finds

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 Million Dollar Listing Los Angeles star Josh Flagg discusses evacuating Los Angeles amid the flames on The Claman Countdown.

The devastating wildfires that have impacted Southern California over the last week could have insured losses topping $30 billion, according to a new analysis.

At least 24 people have been killed in the outbreak of wildfires in the greater Los Angeles area, while officials say that at least 12,000 structures have been damaged or destroyed in the blazes. 

Financial analysts at Wells Fargo Securities released a report to clients on Sunday, which said that their «base case» for insured losses due to the wildfires was $30 billion, adding that the total losses could fall in a range between $20 billion and $40 billion.

Within that total, about 85% of losses are expected to come from homeowners' insurance policies, while 13.5% are commercial property and 1.5% are personal auto losses, the Wells Fargo analysis found. The base case noted that average property values range around $3 million in areas affected by the wildfires.

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In an aerial view, destroyed homes are seen as the Palisades Fire continues to burn on January 9, 2025, in Pacific Palisades, California. (Mario Tama/Getty Images / Getty Images)

«Regardless of outcome we see this as a manageable event for insurers,» the Wells Fargo analysts wrote. They noted that at a total insured loss of $40 billion it would represent a 2% hit to equity for insurers.

Under the $30 billion base case for insured losses, $25.5 billion of those would come from homeowners' insurance policies compared to $4.05 billion from commercial lines and $450 million from auto