The catastrophic wildfires in Maui, Hawaii, have caused between $4 billion and $6 billion in economic losses, according to an estimate by Moody’s RMS on Tuesday.
The estimate looked at property damage and business interruptions across 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 wildfire in the U.S. 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 blaze’s effect on Hawaii’s gross domestic product, government spending on the response to the catastrophe 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. Goods are already more expensive on Maui due to the island’s remote location and labor costs in the construction industry are high.
The wildfires are the worst disaster in Hawaii state history. At least 115 people died in the fires and more than 800 people were still missing as of Monday local time, according to Maui County officials.
The bulk of the losses is likely concentrated in the historic town of Lahaina, where the blaze burned more than 2,100 acres and destroyed almost 2,200 structures, according to Moody’s. Insured property value within the burn footprint of the Lahaina and Kula fires is estimated 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 on Monday vowed that the federal government will help Maui “as long as it takes” to recover and the people of the island will control how the town of Lahaina is rebuilt.
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 is facing multiple lawsuits alleging that downed power lines triggered the fires.