Insurance losses continue to climb from Maui wildfires

Insurance losses - Home fire - money

Aid has started a slow arrival to the Hawaiian island that has been devastated by the blazes.

As Hawaii attempts to cope with the aftermath of the catastrophic wildfires that killed over 100 people and destroyed as many as 2,200 structures, the insurance losses continued to be tallied and are only climbing.

The economic impact of what the blazes left behind is also only just beginning to be tallied.

The Biden administration announced that it would be sending $700 per household in aid to individuals critically impacted by the Maui wildfires. That said, the figure might not be enough to support the state as property damage insurance losses could reach as high as $3.2 billion. If they do, they would represent the largest the state has ever experienced. This total is according to an estimate published by the Karen Clark & Company modeling firm.

Insurance losses - Fire 3.2 billion damage

The majority of the covered damage is from property burnt in the blaze. This means that the majority of payouts will be headed to property owners. The largest disaster payout on record in Hawaii was from Hurricane Iniki, which struck the state in 1992, leaving about $3 billion in damages behind.

Beyond insurance losses, the cost of rebuilding the damage is estimated to be about $5.5 billion.

The Maui Emergency Management Agency and Pacific Disaster Center released the $5.5 billion estimate for rebuilding what was lost due to the wildfires. They also stated that approximately 86 percent of the affected area was in residential use classified zones.

Hawaii’s property values are among the highest in the United States, with the average Hawaiian home currently being valued at over $836,000, according to Zillow data. The average home sale price was $709,000 in June 2023 according to the same source. On the island of Maui, the average home price was about $1 million in July 2023.

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There are also concerns that predatory property developers will see this as an opportunity and will try to pressure victims of the blaze to sell their land.

“We are disheartened to hear that survivors of this catastrophe are being approached by unscrupulous persons whose only goal is to prey upon them,” said Complaints and Enforcement Officer for Hawaii’s Regulated Industries Complaints Office Esther Brown.

It will be a while before final insurance losses totals will be calculated for the wildfire damage as assessments are only just getting started.

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