Hawaii's economic toll from wildfires is up to $6 billion, Moody's estimates
Hawaii's economy has suffered between $4 billion and $6 billion in losses after deadly wildfires ripped through several regions of Maui this month.
The Lahaina conflagration and Kula wildfires in early August burned between $2.5 and $4 billion worth of insured properties in the state, an estimate from risk-modeling company Moody's RMS shows.
The assessment, released Tuesday, reflects direct and indirect losses from physical damage caused by the fires which burned through approximately 2,170 acres, or 3.4 miles. More than 100 people have been confirmed dead as a result of the catastrophe, while more than 1,000 remain unaccounted for.
Moody's calculated the state's economic losses using building-level damage assessments from multiple sources, in addition to damage maps from the Maui Emergency Management Agency.
The estimate of Hawaii's economic losses does not factor in the blaze's effect on the state's gross domestic product; government spending on the response to the catastrophe or the social cost of the fires, as the daily lives of families and communities are forever changed.
Disruption to tourism
Business interruptions are another notable source of economic losses from the fires reflected in Moody's estimates. In addition to businesses directly impacted by the fires, the are also those indirectly impacted.
Small businesses located on safe parts of Maui remain open but are suffering from a loss of tourist dollars as airlines and government officials warn travelers to cancel their trips to Hawaii's second largest island.
"We still need tourists to come to the island. We need them so that we can support locals who were affected," restaurant owner Nutcharee Case, told CBS MoneyWatch. Case has been feeding wildfire survivors by cooking and shuttling free meals to Lahaina, about 22 miles away.
Roughly 70% of every dollar in Maui is generated directly or indirectly through the "economic engine" of tourism, according to the Maui Economic Development Board's website.
Rebuilding
Rebuilding on Maui following the devastating wildfires could cost more than $5.5 billion, officials forecast Saturday. Insurance is expected to cover at least 75% of the economic damage, according to Moody's, because the state has high insurance penetration rates and policies typically cover wildfire damages.
However, "extenuating factors" such as potential supply-chain issues and the impact of inflation on construction prices can drive up the cost of losses even higher than insured-value estimates, the ratings company noted.
