Risk register · entry
Q2 · The CoconutLos Angeles wildfires
Santa Ana winds drove two fires through Palisades and Altadena.
The rare, high-impact event that was always coming, and was always going to be called unforeseeable afterwards.
Why this quadrant
The mechanism itself is Q2-simple, a binary ignition event with no complexity in the causal chain, but the payoff is fat-tailed because of what sits in its path; the story's real interest is watching that simple tail event get transmitted through FAIR Plan assessments and statewide rate surcharges into a Q3/Q4-style correlated, interconnected risk that the original quadrant label can't capture on its own.
The record
- January 7-31, 2025: active fire period (Palisades and Eaton fires)certain
- 31 deaths (18 Eaton, 13 Palisades) officially attributedlikely
- ~440 excess deaths estimated by Boston University/Univ. of Helsinki researchers (smoke, healthcare disruption, stress)uncertain
- 16,000-18,000+ structures destroyed or damaged across both fireslikely
- ~57,500 acres burned across all January 2025 SoCal fireslikely
- Peak wind gusts: 100 mph (Mount Lukens), 98 mph (Santa Monica Mountains)likely
- 200,000+ people evacuatedlikely
- Insured losses: ~$40 billion (Swiss Re); Milliman range $25.2-39.4 billionlikely
- Total economic loss estimates: $50 billion (JPMorgan) to $95-164 billion (UCLA Anderson) to $250-275 billion (AccuWeather, revised estimate)uncertain
- California FAIR Plan assessment: $1 billion, approved by Insurance Commissioner Ricardo Laracertain
- State Farm General's FAIR Plan assessment share: over $165 millioncertain
- State Farm estimated direct losses from the fires: ~$7.6 billion (paying an estimated $6-7 billion total)certain
- State Farm non-renewed ~72,000 CA policies (30,000 homeowners, 42,000 commercial) starting March 2024, before the fireslikely
- Man arrested October 2025 and charged with intentionally starting the Palisades Firelikely
- DOJ lawsuit against Southern California Edison alleges its equipment (an idle transmission line reenergized via induction) ignited the Eaton Fire; seeks $40M+ in suppression/rehab costslikely
Sources
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