California fire losses seen in hundreds of millions

By Adam Tanner and Jim Christie

SAN FRANCISCO (Reuters) - The fires raging in Southern California have likely caused hundreds of millions of dollars worth of damage to homes and businesses, the state's insurance commissioner said on Tuesday.

"This is just a terrible disaster; it's going to be one of the worst ever," California Insurance Commissioner Steve Poizner told Reuters.

He said the total destruction would easily be in the hundreds of millions of dollars, exceeding damages from a fire in Northern California at Lake Tahoe this summer.

"In South Lake Tahoe where we just finished working with the victims there over the last several months, you had 254 homes destroyed at a total cost of $150 million," he said. "Here the damage is much more widespread, more than a thousand homes destroyed so far, plus, you know, scores of businesses."

Analysts with Moody's Economy.com estimated San Diego County will lose $45 million daily from disruptions caused by the fires.

"Early estimates pin the number of homes destroyed at 1,300, for an estimated damage to property of $785 million," their report said. "In a worst-case scenario, if all 69,000 endangered homes were destroyed, the total damage to residential property would balloon to $42 billion."

The most populous with almost 38 million residents and the most economically significant U.S. state, California has faced a constant stream of natural disasters throughout its history, from earthquakes and fires to mudslides.

In the last five years, more than 25,000 wildfires have caused more than $1.5 billion in damage, Poizner said.

In recent days, officials have counted more than 1,000 homes and hundreds of business destroyed from the fires, but a full picture of the damage was unclear.

"They haven't been able to get close enough to the areas to get an accurate count because a large number of the homes that have burned are in the outback," said Alan Nevin, a housing economist with San Diego-based MarketPointe Advisors.

The fires ringing San Diego come amid a difficult time for the city, which faces a housing slump as it sorts out the damage to its finances from a funding scandal in its pension fund for city employees.

"Ironically whenever there is a disaster it stimulates economic activity during rebuilding," said Alan Gin, an economist with the Burnham-Moores Center for Real Estate at the University of San Diego. "We've lost 5,000 construction jobs over the past year so this will put some of those people back to work. That will be financed by insurance money flowing in from outside the county."

MANY COMPANIES CLOSED

From corporate headquarters to retail chains, many area companies told employees to tend to family needs first and consider working from home if at all.

"It's quite chaotic and we're all in the midst of it," said Emily Kilpatrick, spokeswoman for wireless technology and semiconductor developer Qualcomm Inc.