Destroyed houses and cars. August 13, 2023, Lahaina, Hawaii.
Rick Bowmer | AP
Moody’s RMS estimated Tuesday that the devastating wildfires on Hawaii’s Maui island caused between $4 billion and $6 billion in economic losses.
The company said it modeled risks from climate change and natural disasters, looking at property damage and business disruption across residential, commercial, industrial and infrastructure assets.
The actual cost of the deadliest wildfires in more than 100 years in the United States is almost certainly higher than the estimated property damage.
According to Moody’s, the billion-dollar loss estimate does not take into account the fire’s impact on Hawaii’s gross domestic product (GDP), government spending to respond to the catastrophe, and the social costs of the fire. .
According to Moody’s, rebuilding will be costly as inflation drives up prices during the long recovery process. Due to Maui’s remote location and high labor costs in the construction industry, goods are already expensive on Maui.
The wildfires are the deadliest disaster in Hawaii’s history. At least 115 people have died in the blaze, Maui County officials said, with more than 800 still missing as of Monday.
According to Moody’s, most of the losses were likely concentrated in the historic town of Lahaina, where fires burned more than 2,100 acres and destroyed about 2,200 structures. Insured real estate values within the Lahaina and Kula fires are estimated at $2.5 billion to $4 billion.
According to Moody’s, wildfires are generally covered by insurance, and with Hawaii’s high insurance coverage rate, most of the damage (about 75% or more) is expected to be covered by insurance.
President Joe Biden pledged Monday that the federal government will support Maui’s recovery “as long as it takes” and that islanders will control how Lahaina is rebuilt.
The wildfires were fueled by high winds from part of Hurricane Dora and caused by drought on the island.
The cause of the wildfire is still under investigation. Power company Hawaiian Electric is facing multiple lawsuits alleging that a downed power line triggered a fire.
