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23 Aug, 2023 14:10

Hawaii wildfire economic damage assessed

The devastating inferno caused up to $6 billion in losses, according to Moody’s RMS
Hawaii wildfire economic damage assessed

Damage from the deadliest wildfire in modern US history, which killed over 100 people and destroyed countless homes and businesses in Hawaii, could range from $4 billion to $6 billion, according to estimates by Moody’s RMS.

The global catastrophe risk modeling and solutions company said on Tuesday the estimate reflects direct and indirect losses from damage to physical assets. It does not take into account the blaze’s effect on Hawaii’s gross domestic product, government spending on the response to the catastrophe, or the social cost of the fires.

The estimate includes property damage, contents, and business interruption, and covers residential, commercial, industrial, automobile, and infrastructure assets.

According to the report, the losses are likely to be largely concentrated in the historic town of Lahaina, where the blaze burned over 2,100 acres and destroyed almost 2,200 structures. Rebuilding will be costly as inflation drives up prices during the long recovery process, Moody’s said. Insurance is expected to cover about 75% or more of the damage as wildfires are covered under typical policies and Hawaii has a high level of insurance uptake.

“Post-event loss amplification is expected to be high in this event due to the island effect on supply chains, high construction labor costs in general, inflationary impacts during the expected long recovery time, and potential ordinance and law requirements,” stated the vice-president of modeling at Moody’s RMS, Rajkiran Vojjala.

The Hawaii wildfires were the deadliest in the US in more than a century. Fatalities have climbed to at least 115 people and 1,100 were still missing as of Tuesday, according to Maui County officials.

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