Photograph of Lahaina, Hawaii, showing the destruction of homes and cars caused by the catastrophic wildfires on August 13, 2023.
Photo by Rick Bowmer | AP
An estimation by Moody’s RMS revealed that the devastating wildfires in Maui, Hawaii, have resulted in economic losses ranging from $4 billion to $6 billion. The assessment considered property damage and business disruptions across various sectors, including residential, commercial, industrial, and infrastructure assets. Moody’s RMS specializes in modeling risks associated with climate change and natural disasters.
It is important to note that the true cost of this wildfire, the deadliest in the United States in over a century, is likely higher than the estimated property damage. The estimated losses do not account for the impact on Hawaii’s gross domestic product, government spending on disaster response, or the social costs associated with the fires.
Furthermore, Moody’s warns that the rebuilding process will be expensive due to inflationary pressures, which drive up prices. Given Maui’s remote location, goods are already more costly, and labor expenses in the construction industry are high. Recovering from this disaster will entail substantial financial resources.
The wildfires in Maui represent the most devastating disaster in the history of Hawaii. As of Monday, there have been at least 115 reported deaths, with more than 800 individuals still missing, according to officials from Maui County. The majority of the losses are concentrated in the historic town of Lahaina, where over 2,100 acres have been charred, and nearly 2,200 structures have been destroyed.
Property value estimates within the affected area of Lahaina and Kula are between $2.5 billion and $4 billion. Fortunately, a significant portion of the damages is expected to be covered by insurance, as wildfires typically fall under standard policies, and Hawaii has a high level of insurance coverage.
President Joe Biden has assured federal assistance for Maui’s recovery, emphasizing that the people of the island will play a crucial role in the rebuilding of Lahaina. The wildfires were exacerbated by strong winds associated with Hurricane Dora and fueled by drought conditions on the island.
The cause of the wildfires is still under investigation, with Hawaiian Electric facing multiple lawsuits alleging that downed power lines ignited the fires.
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