Damaged homes and cars are shown in Lahaina, Hawaii, Aug. 13, 2023.
Rick Bowmer | AP
The catastrophic wildfires in Maui, Hawaii, caused between $4 billion and $6 billion in economic losses, Moody’s RMS estimated Tuesday.
The estimate looks at property damage and business interruptions to residential, commercial, industrial and infrastructure assets, according to the firm, which models risks from climate change and natural disasters.
The true cost of the deadliest US wildfire in more than a century is almost certainly higher than the estimated property damage.
The billions of dollars in estimated losses do not take into account the fire’s impact on Hawaii’s gross domestic product, government spending on disaster response or the social cost of the fires, according to Moody’s.
Rebuilding will be costly as inflation drives up prices during the long recovery process, according to Moody’s. Commodities are more expensive on Maui due to the island’s remote location and high labor costs in the construction industry.
The wildfires are the worst disaster in the history of the state of Hawaii. At least 115 people have died in the fires and more than 800 people were still missing as of Monday local time, according to Maui County officials.
Most of the losses were likely concentrated in the historic town of Lahaina, where the fire burned more than 2,100 acres and destroyed nearly 2,200 structures, according to Moody’s. The value of insured property within the burn footprint of Lahaina and Kula is estimated to be between $2.5 billion and $4 billion.
Insurance is expected to cover most of the damage, about 75% or more, because wildfires are covered under typical policies and Hawaii has a high level of insurance coverage, according to Moody’s.
President Joe Biden pledged Monday that the federal government will help Maui “as long as necessary” to recover and that the island’s people will control how the town of Lahaina rebuilds.
The wildfires were fanned by high winds in part from Hurricane Dora and fueled by drought conditions on the island.
The cause of the wildfires is still under investigation. Power company Hawaiian Electric has faced multiple lawsuits alleging that downed power lines triggered the fires.
