Wildfires in 2025 caused unprecedented economic damage despite burning relatively little land, according to a new study published Sunday. The Los Angeles fires alone destroyed at least 90 square miles, killed 31 people, and forced over 150,000 residents to evacuate. Globally, insured losses reached $54 billion, making it the costliest wildfire year on record.

The LA fires generated approximately $40 billion in insured losses and $140 billion in total damages when indirect costs are included. Similar destructive blazes struck South Korea and Mediterranean Europe, killing dozens and displacing tens of thousands. Researchers found that only about 1.3 million square miles burned worldwide—the second-lowest since 2002—highlighting how fire severity matters more than acreage.

Experts now track fire intensity and spread patterns rather than just burned area. They call these destructive urban fires urban conflagrations, where tightly packed homes fuel rapid, intense blazes that are difficult to control. This shift in thinking reflects how climate change increasingly threatens expensive infrastructure in populated regions.

The study warns that these catastrophic but relatively small fires represent a new normal. Traditional risk models focused on large fires, but insurers and policymakers must now account for high-density losses in compact areas. As Los Angeles demonstrated, the economic stakes have fundamentally changed.