Recent wildfires in Los Angeles have affected the market for collectible cars, though the extent of the impact remains uncertain, according to BestWire.
Lee Meeler, vice president of claims at Hagerty Inc., a specialty insurer for these vehicles, noted that the region has over 1.3 mn enthusiast cars. Many owners managed to evacuate their vehicles, reducing potential losses.
Hagerty does not disclose claims data or specific details on affected vehicles. The company’s focus remains on ensuring quick payments to impacted customers.
The Palisades and Eaton wildfires, which began in January, could result in insured losses reaching $75 bn, according to a February report from UCLA. The proportion of those losses tied to fine art, collectibles, and classic cars remains uncertain.
Due to the scale of destruction, Insurance Commissioner Ricardo Lara approved a $1 bn assessment on California property insurers. This funding will help the California FAIR Plan continue processing claims from fires that damaged or destroyed over 16,250 structures last month.
The fires have affected a wide range of specialty items, from private collections to museum exhibits. Meeler explained that Hagerty acted quickly in response to the disaster, encouraging members to relocate vehicles when possible and shifting claims support teams to priority status. The company also established an in-person support center and began issuing payments promptly.
One challenge in wildfire claims involves documentation. It’s common for customers to lose both their car and the paperwork. We’ve implemented processes to expedite title reissuance, which helps speed up claims.
Markel Group Inc. has also been impacted. CFO Brian Costanzo stated in a recent earnings call that the fires could result in losses between $90 mn and $130 mn for the first quarter. Markel’s fine art and specie coverage includes art, bullion, and precious metals, with policy limits of $120 mn on its own and $100 mn through Lloyd’s.
Simon de Burgh Codrington, managing director at Risk Strategies Co., said assessing the full impact of the fires on Los Angeles’ art scene remains difficult. The event is recent, and art is insured through various policies.
We have clients with smoke damage, and some have lost major items. We’ve received claims for both art and collectibles, including paintings and sports cars. The extent of losses is still developing.
In some cases, artwork and cars were evacuated before the fires reached certain areas. However, moving these items also posed a risk. Codrington declined to specify the number of claims filed.
The industry is fragmented. These losses span homeowners’ policies, domestic policies, and London policies, involving multiple brokers.
One major institution spared from the fires was the Getty Center. The museum, which opened in 1997, houses significant works from Van Gogh and other classic artists, as well as Greek, Roman, and Etruscan pieces. Getty CEO Katherine E. Fleming credited fire mitigation efforts, including brush clearance and on-site irrigation, for preventing damage.
Codrington compared the potential art losses to those following Hurricane Sandy on the East Coast. Many claims took years to emerge as people initially focused on securing housing and addressing immediate needs.
