Two major Northern California wildfires destroyed more than 1,000 structures as of early morning on Sept. 16, and Munich Re America said the ongoing crisis could eventually cause historic levels of damage.

Mark Bove, senior research meteorologist for Munich Re America, noted in prepared remarks that while it is too early to provide current loss estimates, the Valley and Butte Fires are approaching the damage caused in 2007 with the Witch Creek Fire in San Diego County.

Back then, the wildfires destroyed 1,600 homes, leaving an industrywide insured loss of $1.5 billion.

Bove said the current fires, as they are trending right now, could be the largest wildfire event in Northern California since the Oakland firestorm in 1991. Those fires destroyed 3,200 buildings and left behind an industrywide insured loss of $3 billion, he noted.

As far as insurance coverage for the ongoing event, most wildfire damage tends to be a personal lines exposure instead of commercial lines, because many commercial lines outfits are in major developed areas rather than secluded brush regions, Jim Larkin, senior vice president of property underwriting for Munich Re America, said in prepared remarks.

He said that primary insurers (those that sell directly to consumers) have been using mapping tools to manage and visualize wildfire and other exposures. This method helps determine if a home is insurable, and if so, how much premium they will be charged by a particular insurers.

Some insurers retain third-party companies to perform wildfire mitigation functions for homeowners. These particular insurers, when monitoring and tracking a wildfire, send out the third party companies to a threatened home in order to clear away brush.

AIG is one insurer doing this. On Sept. 15, the carrier announced its AIG Private Client Group’s Wildfire Protection Unit, working with Montecito, Calif. wildfire specialists, spent the day spraying a biodegradable fire retardant and doing other loss mitigation efforts in greater Montecito. They used special purpose-built AIG wildfire protection unit trucks.

AIG Private Client Group serves AIG’s high net worth clients.

Sources: Munich Re America, AIG