If ever there were an example of the real danger posed by wildfires, the Fort McMurray wildfire in Alberta, Canada is it.
Firefighters are struggling to control this massive fire that started last Sunday, is estimated to have destroyed more than 1,600 structures in Fort McMurray and has resulted in more than 80,000 evacuations.
AIR Worldwide also reports:
“With very few exceptions, catastrophic wildfires occur when three conditions are met simultaneously: dry heat maximizes the volatility of vegetation; extreme winds, which can drive the propagation of a fire through that vegetation, occur; and a fire ignites close to a moderately or heavily populated area.”
All three of these conditions have occurred in the Fort McMurray vicinity, and AIR Worldwide notes: “the wildfire that is now happening there is certainly catastrophic.”
While it is too soon to know the extent of the damage and the size of the Fort McMurray wildfire insurance loss, some early reports are helpful.
AIR Worldwide makes the important point that because of the oil industry, housing in the Fort McMurray area is more expensive than its remoteness would suggest and already it is clear that there has been a massive loss of property.
Losses arising from this fire will likely far exceed those resulting from the Slave Lake wildfire in 2011 that destroyed 522 homes and structures, it suggests. The Slave Lake wildfire cost insurers more than C$700 million at the time, according to the Insurance Bureau of Canada.
One analyst at Bank of Montreal observed that if Fort McMurray has to be completely rebuilt, insured losses could reach as high as C$9 billion ($7 billion), making this the costliest insured disaster in Canadian history.
This catastrophe is also a reminder that wildfires pose a significant risk across the United States.
For more on how to protect property from wildfire damage and to reduce the costs associated with wildfire damage check out information from the Insurance Institute for Business and Home Safety (IBHS).