Los 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.

Room: Q2 The Coconut
Year: 2025
Impact: $76-131B
Sector: Wildfire
Region: N. America
Category: Environmental

Why this room

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

The book

This entry is one of 111 in the register. The full story, and what it cost the people who lived it, is in Risky Business by Claudia Zeisberger, David Munro and Joanna Reijgersberg-Siew.

Join the waiting list