Firefighters from an Oregon strike team survey damage at a Sunset Blvd. home leveled by the Palisades Fire in the Pacific Palisades community of Los Angeles on Sunday, Jan. 12, 2025, (AP Photo/Noah Berger) An overhead pole camera image shows wildfire damage at the Altadena Community Church destroyed by the Eaton Fire in Altadena, California, on Jan. 14, 2025. Powerful winds on Jan. 14 threatened to rekindle and whip up major fires that have devastated parts of Los Angeles, killing at last 24 people and changing the face of America’s second biggest city — perhaps forever. (Photo by Patrick T. Fallon / AFP) (Photo by PATRICK T. FALLON/AFP via Getty Images) Maggie Jay, left, business office manager for the Terraces at Park Marino assisted living facility, walks past damage to the facility from the Eaton Fire with her colleagues on Monday, Jan. 13, 2025, in Pasadena, Calif. (AP Photo/Chris Pizzello) Sheila Foster on Thursday, Jan. 9, 2025, examines the damage to her Tesla outside her Altadena home destroyed by the Eaton fire. (Photo by Victoria Ivie, Pasadena Star-News/SCNG) Firefighters study damage at St. Mark’s Episcopal Church after it was destroyed by the Eaton Fire, Friday, Jan. 10, 2025, in Altadena, Calif. (AP Photo/Chris Pizzello) An entry way is all that remains of a burned home in the Hastings Ranch community of Pasadena Wednesday Jan. 8, 2025 during the Eaton fire. Officials announced Thursday that preliminary estimates are that 4-5,000 structures have been damaged or lost from the Eaton fire. (Photo by Will Lester, Inland Valley Daily Bulletin/SCNG) Show Caption1 of 6Firefighters from an Oregon strike team survey damage at a Sunset Blvd. home leveled by the Palisades Fire in the Pacific Palisades community of Los Angeles on Sunday, Jan. 12, 2025, (AP Photo/Noah Berger) Expand The horrific Los Angeles fires are still burning – but the damage estimates have already begun. Weather forecaster AccuWeather is getting buzz – and derision – for its lofty tally of the firestorm’s economic hit: $250 billion to $275 billion. This projection is easily twice as high as other estimates. “Thousands of people are in desperate need of help, initially the basic and life-sustaining needs of food, water and shelter, as this tragedy unfolds,” Jonathan Porter, AccuWeather’s chief meteorologist, was quoted in a Jan. 13 press release. “Many families will face significant unexpected costs to relocate to another area in Southern California. The recovery process will be extremely expensive and emotionally challenging in the months and years to come.” Two local economists scoffed at AccuWeather’s numbers. “Their loss estimates are about as good as their weather forecasts,” said Chris Thornberg of Beacon Economics, citing a page from the weather service’s website calling for minimal winds in Los Angeles on what others feared would be a gusty day. “It’s all about catastrophism.” Thornburg estimates wildfires will damage 12,000 structures, costing $3 million each to fix. That’s about $36 billion. Adding in fire-related expenses, such as fighting the fires, environmental clean-up, relocations and infrastructure repairs, the economist thinks damages will be “probably a bit less than $100 billion. So, a mid-sized hurricane.” “I think that AccuWeather needs to stay in their lane,” said Mark Schniepp of The California Forecast, who thinks it’s way too early for credible estimates. “In past fires, I’ve experienced wild exaggerations of the number of structures destroyed daily while the fires still raged,” he added. Rough guess Disaster math isn’t just an academic exercise. Damage estimates help governments budget for disaster cleanup. It assists the local business community in understanding how their economic prospects may change. Also, insurance companies and their investors must know their exposure to reconstruction costs. Plus, this data gives the public perspective on the scale of any disaster in very tangible terms: Who lost a home? But how accurate can any damage estimate be when the flames aren’t even snuffed out? Consider a key number driving these estimates: damaged or destroyed structures. One source of those numbers, Cal Fire, admits its initial estimates are rough guesses. “These numbers are preliminary based on aerial assessments dedicating heat sources which can include chicken coops, outbuildings, sheds, water containers, fifth wheels, etc.” Cal Fire said. The estimates are then “ground-verified by damage assessment teams.” As of Jan. 15, Cal Fire preliminary reports listed more than 12,000 L.A. structures involved, but its verification had so far found 6,818 structures destroyed and 883 damaged. Not every analyst rushes out a number. Ponder the more reserved tones of other damage trackers on the LA fires. Corporate credit watcher Moody’s wrote on Jan. 10: “While it is too early to assess insured losses in detail from the Los Angeles wildfires, it’s already clear that this is a major insured and economic loss.” Real estate tracker CoreLogic had equally reserved thoughts on Jan. 13 when it estimated 16,636 properties in the path of the fires that would cost $13 billion to rebuild. “Not all properties within the fire perimeter are necessarily damaged by fire,” CoreLogic wrote. “Additionally, properties that are impacted may not have sustained damage equal to their full reconstruction cost value.” And this damage gap isn’t new. Go back to 2017, when a horrific series of fires burnt California’s wine region. Insurance broker Aon Benfield estimated $13 billion in economic losses, while AccuWeather saw $85 million. Double trouble Los Angeles isn’t the first climate disaster in which AccuWeather’s damage estimates run high. Last fall, the Southeastern U.S. was hammered by two massive hurricanes, Helene and Milton. Again, AccuWeather’s damage estimates were generous, ranging from $385 billion to $430 billion for the combined economic losses. Compare those guesses to CoreLogic estimates of total structural damage — $52 billion to $82 billion. Or Moody’s projected insurance claims of $35 billion and $55 billion. Bottom line Parsing financial industry loss estimates against AccuWeather’s holistic math may be a case of apples to oranges – where AccuWeather counts every fruit and vegetable. AccuWeather is proud its cost estimates are far above other’s projections. It claims it’s accounting for a slew of broadly defined disaster-related costs that others ignore. “The damage and suffering from hurricanes and extreme weather are often much greater than what is initially reported and what insurance typically covers,” AccuWeather founder Joel Myers wrote in a 2024 weather-damage wrap-up. “The long-term effects of weather disasters are harmful to longevity. People experience trauma, they lose their possessions, they end up with less money to rebuild, pay for health expenses and eventually retire.” I applaud AccuWeather’s message: Disaster fallout is more than the expense of repairs and dislocations. Emotional pain and resulting health issues are real. But then there’s another harsh truth, too. One that I’ll admit overlooks the suffering of the victims. Disaster economics frequently ignores humanity. Look, at least 25 died in the Los Angeles fires. Try to enumerate that loss. Still, the financial bottom line is that cleanup, reconstruction, and relocations – whether paid by insurers, government or citizens – can boost the afflicted area’s business climate. As economist Thornberg, citing years of forecasting disaster scenarios, put it: “With few exceptions, such episodes are characterized by a temporary dip in employment and consumption, followed by a surge in economic activity fueled by recovery spending.” Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at [email protected] Related Articles For LA water issues, misinformation spreads nearly as fast as the wildfires Firefighters need better weather to fight California’s flames. When will they get relief? Winds, arsonists complicate fight against LA-area wildfires as crews report progress New wildfire warnings issued and more power is shut off as winds rise in Southern California After disasters, people are especially vulnerable to scams. 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