California Wildfires: Economic Damages for Fire Victims

A wildfire claim is not one loss. It is six or seven different losses that happen to share a cause, and California instructs the jury on each of them separately. Getting the heads of loss right at the outset — before anyone starts collecting documents — is most of the work.

The heads of loss, and the instruction that governs each

Wildfire matters draw on more of the CACI 3900 series than almost any other case type. Sorting a claim into the right columns early prevents the two problems that damage these files later: a loss that never gets proven because nobody assigned it an instruction, and the same loss counted twice under two headings.

• CACI 3903F — damage to real property. The land and the structure. Note the exception that lets repair cost exceed the drop in value where an owner-occupant genuinely intends to rebuild — in a total-loss residential fire, that is frequently the whole case.
• CACI 3903G — loss of use of real property.
• CACI 3903H and 3903I — damage to an annual crop and to a perennial crop. Different measures, and the difference is real money in agricultural counties.
• CACI 3903J and 3903K — damage to personal property, and loss or destruction of it. Contents, equipment, vehicles.
• CACI 3903M — loss of use of personal property.
• CACI 3903N — lost profits, where a business was interrupted or destroyed.
• CACI 3903A through 3903E — medical expenses, lost earnings, lost earning capacity and household services, where there was personal injury or death.

What an economist can and cannot quantify

An economist can put defensible numbers on damage to real and personal property, additional living expenses, lost wages, business losses, and the medical and earnings components of a personal injury or wrongful death claim.

An economist cannot quantify emotional distress — the fear experienced while evacuating or sheltering in place, the loss of a home as a home rather than as an asset. Those are noneconomic damages, and they are established through testimony rather than calculation. It is worth being explicit about the line in the claim packaging, because a report that reaches for it undermines the parts of the analysis that are genuinely quantifiable.

Business losses

Common components are lost revenue and profit during the interruption, destroyed inventory, commercial vehicles and equipment, and the increased cost of operating from a substitute location. For sole proprietors the documentary base is usually Forms 1040 with Schedules C, E or F.

Before a lost profits figure can be defended, five facts have to be established:

1. Whether the business ceased operating or entered bankruptcy after the fire.
2. Financial data broken out by loss location, where the business had more than one.
3. Whether operations resumed at the loss location, or are intended to.
4. The seasonality of the business, since a fire in a peak month and a fire in a trough month produce very different losses from identical annual revenue.
5. Documentation supporting destroyed inventory and vehicles, which is the component most often lost with the premises.

The methodology is the same as any other lost profits analysis under CACI 3903N. What differs in wildfire matters is the evidentiary problem: the records that would prove the claim frequently burned with the business.

Wage loss and displacement

Wage claims turn on employer name, dates of employment and the length of time out of work — and, where the employer itself was destroyed, on whether comparable work existed in the local labor market afterwards. Evacuation-period wage loss and long-term displacement from a regional labor market are different calculations, and mass-displacement events routinely produce both.

Additional living expenses — temporary housing, increased commuting, replacing the ordinary contents of a household — are usually the first losses incurred and the least well documented, because nobody keeps receipts in the first month.

Agricultural losses: perennial versus annual

The distinction the 3900 series draws between annually planted and perennial crops is not cosmetic.

For a perennial crop — a vineyard, an orchard — damages during the restoration period are measured by the difference between the rental value of the land with the crop and its rental value without. For a destroyed harvestable crop, the measure is the expected market value of the crop before the harm, less the production and marketing costs already avoided. Pasture that has to be reseeded carries both the rental value difference and the reseeding cost.

Against that, Baker v. Ramirez is the case to know. The traditional measure for destroyed productive trees is the difference in property value before and after — but where only part of a grove was damaged, replacement was practicable and restoration was reasonable, the cost of restoring the grove was held to be the appropriate measure. Growers may recover crop loss, increased labor costs and the cost of replacing trees or restoring the property.

Acreage is not exposure

The fires that generate the largest damages claims are not the largest fires. Acreage measures how much land burned; damages follow what was standing on it.

California’s ten largest fires by area, per Cal Fire’s own tally (largest-fire list updated October 2024; most-destructive list updated October 2025):

• August Complex, 2020 — 1,032,648 acres, 935 structures
• Dixie, 2021 — 963,309 acres, 1,311 structures
• Mendocino Complex, 2018 — 459,123 acres, 280 structures
• Park, 2024 — 429,603 acres, 709 structures
• SCU Lightning Complex, 2020 — 396,625 acres, 225 structures
• Creek, 2020 — 379,895 acres, 858 structures
• LNU Lightning Complex, 2020 — 363,220 acres, 1,491 structures
• North Complex, 2020 — 318,935 acres, 2,352 structures
• Thomas, 2017 — 281,893 acres, 1,060 structures
• Cedar, 2003 — 273,246 acres, 2,820 structures

Compare the top two. The August Complex burned more than a million acres and destroyed 935 structures. The North Complex burned less than a third of that area and destroyed 2,352. The Camp Fire, which does not appear on the list above at all, destroyed 18,804 — more than every fire on it combined.

The January 2025 Eaton and Palisades fires made the same point in an urban setting. Eaton burned 14,021 acres and destroyed 9,413 structures; Palisades burned 23,707 acres and destroyed 6,833. Neither appears anywhere on the list above, and both now sit second and third on California’s most destructive list, behind only the Camp Fire. Eaton’s footprint was roughly 1.4 percent of the August Complex’s — and it destroyed ten times as many structures. For a damages analysis, the burn scar is a map. The exposure is what was inside it — housing density, the mix of owner-occupied and rented, the commercial base, and the agricultural profile of the surrounding land.

Where to start on a file

The heads of loss should be assigned before document collection begins, because each one implies a different record set and the records are frequently gone. Where a claim covers a household, a business and land under one loss, the three analyses need to be built separately and then reconciled — the same displacement should not appear as additional living expense, loss of use and lost profit.

Related: personal injury litigation support · damages to real property · lost profits calculations. Sources: the Judicial Council’s California Civil Jury Instructions; Cal Fire wildfire statistics.