There may be wildfires, but that doesn’t mean that Californians can rest easily. The January 2025 wildfire is on track to become the most expensive natural disaster in US history. It boasted the damage caused by Hurricane Katrina in 2005. Already, California’s fair plans have run out of money and are calling on private home insurance companies and state homeowners for financial assistance.
The Los Angeles wildfires brought on the expected onslaught of household claims. Many large insurers deploy dedicated catastrophic or “cat” teams to directly target high claims. However, policyholders who made active and unresolved claims before the fire broke out may be questioning what will happen next. California insurance laws grant consumers the right to a timely claim investigation, among other rights. If you have an open home insurance claim and are wondering how wildfires will affect your handling, it can help you understand how to navigate your busy billing period, especially.
I filed a request before the fire began. Will wildfires affect my claim?
Your billing timeline depends heavily on the type of bill you have. However, in general, late insurance payments are not off the table. According to JD Power, the average home insurance claim cycle time in 2023 was almost 24 days, an increase of six days compared to 2022. The timeline of catastrophic claims is longer than about 34 days.
“In the aftermath of the California wildfire, there have been reports of delays from individual line insurance companies in handling claims,” says Laila Brabander, president of Gallagher Private Client. However, some insurers are equipped to handle the inflow of claims more than others.
“Companies claimed by Cat Teams, a dedicated catastrophic event claims team, may be even more delayed in processing claims before and after events,” Brabander said. “These specialist cat teams, which many of the larger domestic airlines have, are important to ensure a prompt response to claims related to catastrophes and to maintain the service level of all other billing.”
Many of California’s large household insurers are ready to help catastrophe teams, and some are also customer service pop-ups on the ground. More than 33,000 home and business insurance claims have been filed since the Los Angeles fire, according to the California Department of Insurance. To compare, about one person in a 425 insured home typically file a fire or lightning-related claim in a particular year.
How do post-disaster claims work?
With insurance claims, fewer claims tend to be resolved faster than larger claims. For example, it may take longer for your home to resolve claims related to the foundation, roof, or something like a broken window. However, Californians will be affected for a long time by the January wildfire, including the possibility of delays for homeowners with prominent claims. As of February 5, 2025, more than $6.9 billion was paid out in home and commercial insurance claims from a Los Angeles wildfire earlier this year, according to the California Department of Insurance (CDI).. The car didn’t even spare from the flames. CDI also reported $73 million in car insurance claims resulting from the January 2025 wildfire. On January 13, California Insurance Commissioner Ricardo Lara declared a state of emergency in Los Angeles and Ventura counties, allowing out-of-state, non-licensed coordinators to handle the massive amounts of claims.
If the insurer is experiencing heavy, widespread losses (as we did with Pallisard in the Pacific), the magnitude of the financial impact can increase the cost of household insurance.
Know your rights: California Home Insurance Claims Act
In California, insurance companies must adhere to certain timelines and standards for claims in your home. Importantly, these rules apply only to licensed insurance companies in recognized states. This is not the case for surplus and excess line insurance companies.
The rules listed below apply to claims submitted in front On January 7th, insurance committee member Ricardo Lara declared a state of emergency. Under an emergency, the claims timeline and protocols look a little different. If you file a request by January 7th of this year, everything will apply in accordance with California law.
| 15th | Your insurance company must begin your claim investigation within 15 days of submitting your claim. |
| 30 days | Insurance companies must transfer uncontroversial payments within 30 days of the payment agreement. You also have the right to update your claims while remaining unresolved every 30 days. |
| 40 days | After filing, the insurance company will have 40 days to accept or reject your claim – full or partial. If your claim is rejected, you have the right to a written explanation of the reason. If your insurance needs more time to process your claim, it should explain to you by writing you the reason for the delay, the additional information it requires, and giving you an estimated time frame. |
| 60 days | Insurance companies must notify you within 60 days of the deadline to cut off whether to cut off your right to sue additional benefits. |
| 6 months | Insurers can assign subsequent adjusters to help process claims. If this occurs within the six months of filing your claim, you are entitled to a written status report detailing your losses, payments, and coverage restrictions, as well as whether there are other hired professionals to process your claim. |
The claims process can be overwhelming and confusing. In theory, the process is simple. You experience the loss, file a claim, and the insurance company handles the rest. However, reality can sometimes look different. If there is an aggressive claim, there are a few other details of California insurance law that should be on the radar.
- You can choose your own contractor: You don’t need to go with the contractor chosen by your insurance company. You are allowed to choose yourself. Make sure it is fully licensed in California. If you go with someone proposed or recommended by the insurance company, you need to ensure that the work is at current trade standards.
- Repairs must be uniform: If only a part of your home is damaged, your policy can cover work in the undamaged part of your home and achieve a uniform look.
- You are covered for the resulting damage: Sometimes, repairing a part of your home requires you to do some kind of work on the undamaged part of your home. You are covered for extra repairs of them.
- You can access the claim file: If you request a copy of your claim file, the insurance company must send the copy within 15 days of making the written request. This is useful if you want to bring a public adjuster into the billing process and speed up.
- If you have a replacement cost (RCV) policy, you are entitled to an actual cash value (ACV) payment prior to the rebuilding process. If your home and/or belongings are insured at replacement costs, you are entitled to receive the actual cash value of your loss before repairs begin.
learn more: RCV vs ACV Home Insurance Policies
What’s next for a California homeowner?
California’s home insurance market is located in unknown waters. The wildfires may have only affected small areas throughout the state, but California homeowners will feel the impact for years to come. For now, homeowners with positive claims may need to be patient to take into account the influx of catastrophic claims and prepare for future market turbulence. California’s last resort insurance plan, Fair Plan, has used up money and called on private companies that support it for capital injections. According to new California insurance regulations, homeowners across the state could be on the hook for fair planning losses up to $1 billion paid in the form of one-off supplementary expenses.
Additionally, as part of the approval of the state farm’s recent 22% interim rate increase, the insurance company’s parent company, State Farm Mutual, will need to provide $500 million to its California subsidiary to ensure its claims are paid. The interim hike has agreed to suspend all policy cancellations and non-renewals until the end of 2025. This is important given that the state’s farms are the largest insurance company in Golden State and include homes across California rather than emergency claim zip codes. While this is just an example, property insurance aims to be more expensive in the short and long term for California homeowners.
