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California wildfire losses estimated at $2 billion

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Insurance losses from the still-burning Carr blaze in northern California have likely hit $US1.5 billion ($2 billion), making for a second consecutive highly destructive wildfire season, Moody’s estimates.

The fire, started on July 23, has destroyed more than 1500 homes and other buildings, and burned more than 60 hectares.

It has caused at least eight deaths and at last report was only 60% under control.

Fires last October and December caused losses of $US11.8 billion ($15.9 billion) in California, with 10,000 structures destroyed and 1200 damaged.

The average claim size from the Carr fire is likely to be significantly lower than state-wide averages because of home values in the affected area.

But Moody’s warns the state is already seeing high construction demand due to last year’s wildfires and a strong housing market, and the Carr blaze will lead to higher insured losses as demand for labour and materials rises.

“California homeowners insurers are also likely to be adversely impacted by additional living expense claims, given that about 40,000 residents were subject to evacuation orders,” the ratings agency says.

The Carr wildfire is the sixth-most destructive in California’s history.