A Firm Foundation: How Insurance Supports the Economy

Fire plays an important role in the life of a forest, clearing away dead wood and undergrowth to make way for younger trees. But for much of the last century, fire-suppression policies have sought to extinguish wildfires as quickly as possible to preserve timber and real estate. This approach has led to the accumulation of brush and other vegetation that is easily ignited and serves as fuel for wildfires. Most of the large fires with significant property damage have occurred in California, where some of the fastest developing counties are in forest areas that were once largely uninhabited. These areas, known as the Wildland-Urban Interface (WUI), contained about a third of all housing units in the United States in 2017, according to the U.S. Forest Service.

Top 10 Costliest Wildland Fires In The United States (1)

($ millions)

      Estimated insured loss
Rank Date Name, Location Dollars when occurred In 2018 dollars (2)
1 Nov. 8-25, 2018 Camp Fire, CA (3) $8,500 - $10,500 $8,500 - $10,500
2 Oct. 8-20, 2017 Tubbs Fire, CA (3) 7,500 - 9,500 7,700 - 9,700
3 Nov. 8-22, 2018 Woolsey Fire, CA (3) 3,000 - 5,000 3,000 - 5,000
4 Oct. 8-20, 2017 Atlas Fire, CA (3) 2,500 - 4,500 2,600 - 4,600
5 Dec. 4-23, 2017 Thomas Fire, CA (3) 1,500 - 3,500 1,530 - 3,600
6 Oct. 20-21, 1991 Oakland Hills Fire, CA 1,700 2,851
7 Oct. 21-24, 2007 Witch Fire, CA 1,300 1,552
8 Jul. 23-Aug. 30, 2018 Carr Fire, CA (3) 1,000 - 1,500 1,000 - 1,500
9 Oct. 25-Nov. 4, 2003 Cedar Fire, CA 1,060 1,417
10 Oct. 25-Nov. 3, 2003 Old Fire, CA 975 1,304

(1) Property losses only for catastrophic fires. Effective January 1, 1997, ISO's Property Claim Services (PCS) unit defines catastrophes as events that cause more than $25 million in insured property damage and that affect a significant number of insureds and insurers. From 1982 to 1996, PCS used a $5 million threshold in defining catastrophes. Ranked on dollars when occurred. As of August 8, 2019.
(2) Adjusted for inflation through 2018 by the Insurance Information Institute using the GDP implicit price deflator.
(3) Insurance Information Institute estimate based on data from catastrophe risk modelers, reinsurance companies, the California Department of Insurance, and the Property Claims Services unit of Verisk Analytics. These estimates are preliminary because the organizations involved periodically resurvey the events, and the severity of losses and other factors create a high level of uncertainty surrounding the ultimate loss figures.

Source: Insurance Information Institute, catastrophe risk modelers, reinsurance companies, the California Department of Insurance, the Property Claim Services® (PCS®) unit of ISO®, a Verisk Analytics® company, and the U.S. Bureau of Economic Analysis.

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