San Diego damage estimates


The news is starting to read like the SoCal wildfires are winding down - at least a few of the fires are still going strong, but some of the early major burns are contained or over.

I was asked the other day what I thought this would do to insurance rates for the rest of us, as the insurers spread their losses. More, or less, than Katrina? Well, the average home destroyed in the California fires is probably worth a lot more than the average home destroyed by Katrina, but the concentrated urban buying power effect kicks in with impressive scale. Let's get the numbers from the sick-fascination-with-train-wrecks department:

From the AP on California:

In all, more than a dozen fires had raced across more than 500,000 acres -- or 781 square miles -- by Friday. At least three people and possibly seven have been killed by flames. Seven others died of various causes after being evacuated.

About 1,700 homes have been destroyed, and damage has been put at more than $1 billion in San Diego County alone.

And, from the ISO on Katrina:

After an extensive analysis of the flood and storm surge damage caused by Hurricane Katrina, AIR Worldwide estimates that property damage caused by water will total approximately $44 billion. . .AIR estimates the cost of flood damage to New Orleans will be $22.6 billion.

Clearly, San Diego can't hold a candle to Louisiana (and I don't expect they'd want to hold candles at all right now, considering...), and I expect global capital flows will swallow up the fire damage like so much noise. Either way, it's impressive just how quickly property damage can stack up in these disasters. When was the last time any discrete event caused a billion dollars of property damage in the midwest? (Aside from agricultural losses...)

Just out of curiousity. . .the Insurance Information Institute estimates that 9/11 causes $40.2 billion in insurance losses; $9.5b of that in property damage.

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Eight and a half years at most

When was the last time any discrete event caused a billion dollars of property damage in the midwest? 1999, a few days before I was set to graduate from college, a series of tornadoes from a large storm system tore through Oklahoma and Kansas and caused almost $1.5 billion in property damage. I remember seeing the funnel of the largest F5 while I was sprinting to the tornado shelter in the basement of the university library. It was almost ten miles away, but it was more than a mile wide, so it was hard to miss!

The final exam of my Poli Sci capstone class was the following morning; about one student in four missed it, because they were helping their parents dig out their houses.

You might argue that a series of tornadoes isn't a discrete event, but then neither is a series of wildfires. The better argument, of course, is over whether Oklahoma and Kansas are in the midwest.

thanks, lazywebs!

74 tornados! Wow! Yeah, I'd definitely count those.

And tornados are a good counter-argument against dumping on the coasts for living in the way of hurricanes and wildfires - they're typically more unpredictable for any given location (and the "location" of tornado damage can be incredibly fine-grained), making them the very unpredictable / unpreventable type of natural event that people fear. If you live in Florida, you at least know that a hurricane of some size is going to come through every few years.

On the third hand, though, as reported by the California Climate Data Archive, In the Los Angeles Basin, for the period of 1950-1992, there were 3.19 tornadoes per square kilometer per year. In the state of Oklahoma, there were 2.86 tornadoes per square kilometer per year for the same period. Oklahoma does get more more tornadoes of F1 or higher, but it's not as if it's a uniquely midwestern occurrence.

As a side note, I'm pretty impressed that your college had a library a mile wide...

Tptphth. :p Norman sits in a

Tptphth. :p

Norman sits in a slight depression. Tornadoes heading for it tend to be deflected along the edge of that depression. Thus poorer towns like Blanchard, Newcastle and Moore tend to make the news after each twister, while Norman escapes mostly unscathed. It's an excellent demonstration of why you should aim for a low spot if you're caught outdoors with a tornado heading for you.

Well, there is not enough water

and then there is too much water: Mississippi floods of 1993. "From May through September of 1993, major and/or record flooding occurred across North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri, Wisconsin, and Illinois. Fifty flood deaths occurred, and damages approached $15 billion."

Floods = Predictable

Floods, unlike tornadoes, fall much more into the category of "predictable location." You're much more likely to be affected by a Mississippi river flood if you live on the river (or drive on a bridge over it...thanks, Minnesota) than if you live a few miles away from it, or even right next to the river at a much higher elevation.


Hooray for numbers! (At least a few.) From that source,

Record summer rainfalls with amounts achieving 75- to 300-year frequencies thus produced record flooding on the two major rivers, equaling or exceeding flood recurrence intervals of 100 years along major portions of the upper Mississippi and lower Missouri Rivers (Fig.3) (Stallings, 1994).

I'd be interested in knowing how much of the flood damage was above the 100-year-flood line. Because that's a case where we've recognized and quantified a predictable hazard - and, likely, much of the damaged area below the 100-year-flood line has not been rebuilt, because of regulation or insurance costs.

There are other such cases on the coasts, of course - California and Florida have specialized building codes designed with earthquakes and hurricanes in mind - and private insurers are learning...but, of course, attempts by insurers to raise rates are typically fought tooth and nail. (Not to say that insurance companies are always noble and above reproach - but there are times when market mechanisms for price setting really do Work.)

California insurance rates

A quote from today's News (an article originally in the Washington Post) says that the California fires will have little effect on insurance rates because "It's well within the range of losses we expect to see in California every few years. That means the rate in the area is already reflected with the risk associated with wildfires." Those must be some premiums!

We had friends who moved into a new subdivision in the mountains near Denver several years ago. The houses all had to have specific fire-rated tile roofs and siding and couldn't have plantings within a certain number of feet of the house because of the fire potential. My mother-in-law has to evacuate her Colorado mountain house every few years because of alternating fire and flood danger (she is in a valley which makes her less vulnerable to fire, but more vulnerable to flash flood). I think most of what we call "natural disasters" are actually pretty predictable within a range. I With more and more houses (and more expensive houses) being built in fire-prone areas, I wonder if fire insurance is going to end up like flood insurance.