The latest Californian wildfires insurance costs are to set back insurers between $9bn and $13bn due to extensive property damage and business interruption, according to risk modelling firm RMS.

The Camp wildfire in northern California is likely to cost $7.5bn to $10bn to insurers, whereas the Woolsey wildfire in southern California is expected to cost $1.5bn to $3bn.

The Californian wildfires insurance cost includes property and auto damage, including burn and smoke damage, business interruption (BI), additional living expenses (ALE), and contents loss.

In order to derive the estimated losses, RMS used its forthcoming North America Wildfire High Definition (HD) Model that imitates the ignition, fire spread, ember accumulations, and smoke dispersion of the fires.

The model’s findings were supported by damage reports from the California Department of Forestry and Fire Protection (CAL FIRE) as well as observations from displaced residents, and information from fire-fighters.

Currently, the Camp and Woolsey Fires have burned a combined total of 245,000 acres, destroyed more than 12,000 homes and businesses, and killed 80 people.

The Woolsey fire alone burnt over 1,450 high value properties and killed three.

RMS chief risk modelling officer Mohsen Rahnama said: “Wildfire is now a major catastrophe risk that must be rigorously managed with the best data and model science. With increasing exposure due to properties near wildland areas and ongoing climate variability, insurers, policymakers, and homeowners must adapt to the prospect of more frequent and severe wildfires.”

“In the wake of consecutive record-breaking wildfire seasons, we are hopeful that more focus will be placed on fire mitigation, safe construction practices, and community resilience.

“The forthcoming RMS HD Wildfire model, developed in partnership with leading insurers and fire experts, represents a step change in measuring wildfire risk, with a 50,000-year climate simulation, explicit ember and smoke simulations, and a vulnerability module calibrated on hundreds of millions of dollars of claims data. We are confident the model will contribute to the creation of safer communities that promote fire safety and awareness.”

Both of the Californian wildfires spread rapidly due to low moisture, dry vegetation, abnormally high temperatures, and intense seasonal winds.