Insurers that raised premiums are facing criticism better directed at a lack of climate change action, with the Los Angeles wildfires part of escalating global natural disaster impacts, the Australia Institute’s executive director says.

Richard Denniss says scientists have warned for decades about the repercussions from burning oil, coal and gas, economists have been saying “prevention is cheaper than cure” and insurers have been raising premiums in a trend that is likely to continue as reinsurance expenses increase.

“Everyone is going to blame them, but of course that’s the irony,” he told ABC Radio’s News Breakfast this morning. “We are blaming the insurance companies, not the fossil fuel industry, for the cost of climate damage.”

The Australia Institute, a Canberra-based public policy think tank, says it is difficult to know exact reinsurance and insurance impacts from the US wildfires.

“We know the correlation between payouts for insurance companies and premiums for insurance,” Dr Denniss said. “It will take time to figure out exactly how this is going to play out, but we know the direction and we know it is going happen year after year. The more fossil fuels we burn, the more expensive our insurance will become.”

Australia spends $14 billion a year subsidising fossil fuels but is “not spending anything like that” protecting homes from floods and fires, he says, and insurers are not going to cover events that are highly likely.

“You can’t insure against the costs of climate change. We can decide how to spread those costs around, but we can’t make them go away through insurance.” 

Emergency Management Minister Jenny McAllister said last week that a review of national aerial firefighting requirements, announced in the last budget, is due to be delivered this year.

“We know that right across the world we are seeing longer fire seasons and more intense fire weather,” she said.

The LA wildfires that ignited on Tuesday last week were fuelled by strong winds and dry winter conditions. They have killed 25 people and damaged more than 12,000 structures.

Moody’s says it is too early to calculate a cost but it is clear these will be the costliest wildfires in US history, with previous California blazes generally concentrated in less densely populated and often inland areas.

“Unfortunately, this time is quite different. More tightly packed areas in Los Angeles County and higher-end properties throughout the affected area are bearing the brunt, resulting in unprecedented destruction,” it says.

Moody’s director of product management Firas Saleh says housing has expanded in the “wildland-urban interface”, with the metropolitan area surrounded by the Angeles National Forest to the north and Santa Monica Mountains to the west.

He says embers can spread for kilometres driven by the strong Santa Ana winds blowing across the mountains to the Pacific. The winds, peaking at 160km/h, make firefighting difficult as aerial tankers are grounded or water blows away from targets.

Los Angeles International Airport received just 0.76mm of rainfall for the first two months of the southern California “wet season”, extending from November to April.

Fitch Ratings says in a report dated Monday that “significantly wide” estimates for insured losses range between $US10 billion ($16 billion) and $US30 billion ($48 billion), and economic losses between $US150 billion ($242 billion) and $US275 billion ($444 billion).

Wildfire, while a growing source of losses in California, was previously viewed as a secondary peril to more costly hurricane and earthquake insured losses, it says.