Insurers Will Pay an Estimated $70 Million in Claims from New Mexico Brush Fire Lit by the National Park Service

NEW YORK, May 26, 2000 — Insurers will pay an estimated $70 million on more than 6,000 claims resulting from the Cerro Grande, N. M., wildfire that raged out of control for nearly three weeks after it was ignited by the National Park Service, according to the Property Claim Services (PCS) unit of Insurance Services Office, Inc. (ISO).

Federal authorities ignited the prescribed burn on May 4 to eliminate fire-causing dry brush and other accumulated vegetation that might feed future fires. On May 10, high winds pushed the fire into Los Alamos Canyon forcing the evacuation of 18,000 residents, and damaging or destroying some 250 homes and hundreds of cars. Most evacuees incurred additional living expenses covered by their homeowners insurance policies.

The worst wildfire catastrophe on record was the Oakland/Berkley Tunnel Fire of 1991 in northern California, which destroyed about 2,500 homes and caused an estimated $1.7 billion in insured damage.

The number of acres burned each year in U.S. wildfires fell from a peak of 52.3 million in 1930 to 3.6 million in 1958. Since then, the number of acres burned each year by wildfires has remained fairly steady, ranging from a high of 7.4 million in 1988 to a low of 1.6 million in 1993, U.S. government figures show.

ISO's claims estimates represent anticipated insured loss on an industrywide basis arising from catastrophes, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses. Estimates exclude loss-adjustment expenses.

A catastrophe is an event that causes $25 million or more in insured property losses and affects a significant number of property/casualty policyholders and insurers.

Release: Immediate

Giuseppe Barone / Erica Helton
MWW Group (for ISO)
201-507-9500 /

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