Los Angeles Wildfires (January 2025) and home insurance

The Palisades and Eaton fires of January 2025 were the costliest wildfires on record, at about $40 billion in insured losses. Most claims are well along: California's Department of Insurance (CDI) counted $25.2 billion paid on 41,727 claims as of July 6, 2026. The date that matters most to an owner still in a dispute is January 2027, when the 24-month window to sue over a state-of-emergency loss closes for most of these claims.

What happened

Wind-driven fires broke out across Los Angeles County on January 7, 2025. The Palisades fire burned through Pacific Palisades and the Eaton fire through Altadena and parts of Pasadena. CAL FIRE figures cited by the Insurance Information Institute put the destruction at 6,833 structures and 12 deaths for Palisades and 9,413 structures and 18 deaths for Eaton, as of April 2025. FEMA declared major disaster DR-4856 on January 8, 2025, with Individual Assistance for Los Angeles County.

Aon puts insured losses at $41 billion, $23.0 billion for Palisades and $17.5 billion for Eaton; Munich Re, Swiss Re and Gallagher Re each put the total near $40 billion. CDI's tracker, which includes home, business, living-expense and auto claims from the two big fires, showed 40,482 claims at least partially paid by July 2026.

On January 9, 2025, CDI Bulletin 2025-1 imposed a one-year moratorium on wildfire-based cancellations and nonrenewals; amended on January 14 and 17, it reached about 96 ZIP codes around seven fires and required insurers to offer to rescind wildfire-risk nonrenewals issued on or after January 7. On February 11, 2025, the Commissioner approved a $1 billion assessment on member insurers by the California FAIR Plan, half of which insurers may recoup from their policyholders.

What to do now

For most owners the emergency phase is over, and the work is closing out the claim on your terms.

1. Write down your three clocks. Living expenses, contents and dwelling each have their own limit and deadline. Ask the adjuster in writing which coverages are still open and when each ends.
2. Watch the suit deadline. If you disagree with a settlement, the time to sue is 24 months from the start of the loss for a state-of-emergency loss, so about January 7, 2027. Insurers must warn unrepresented claimants in writing at least 60 days before a limitation period runs out. Talk to the insurer, CDI or a lawyer well before then (deadlines to sue over a home insurance claim).
3. Collect the rest of the dwelling money as you rebuild. Policies typically pay actual cash value first and the withheld depreciation when you rebuild. California gives at least 36 months from the first ACV payment to collect it, with extensions for good cause (rebuilding after a wildfire: the insurance claim).
4. Revisit the contents claim. For a total loss from a declared emergency, California now requires an insurer to offer at least 60% of the contents limit, up to $350,000, without an itemized inventory (from January 1, 2026). You can claim more with a full list; the home inventory builder helps.
5. Check whether you are underinsured before you sign a rebuilding contract. Compare the bids with your dwelling limit plus any extended replacement cost and ordinance-or-law coverage (underinsured after a disaster: your options, home replacement cost estimator).

Claim rules and deadlines

California law gives wildfire claimants more time than most states, but the clocks are fixed in statute:

• Living expenses: at least 24 months for a declared-emergency loss, with up to 12 more months for delays beyond your control (Ins. Code §2060). CDI's February 2025 notice told insurers a home can be uninhabitable because of toxic ash or debris even when the area is open.
• Rebuilding: at least 36 months from the first actual cash value payment to collect replacement cost.
• Suit: 12 months from inception of the loss normally, 24 months for a loss related to a state of emergency (Ins. Code §2071).
• Claim handling: acknowledge and begin investigating within 15 days, accept or deny within 40 days of proof of claim, pay within 30 days of acceptance (10 CCR §§2695.5, 2695.7).
• Renewal: after a disaster total loss, the insurer must offer to renew for at least two annual periods and no less than 24 months from the loss (§675.1(a)).

Put your dates in the home insurance claim deadline calculator.

Where to get help

CDI's consumer hotline is 800-927-4357, and it takes complaints about delays, low offers and living-expense cutoffs. FEMA's helpline (800-621-3362) handles questions about DR-4856 assistance already approved.

What it means for home insurance

The fires turned California's availability problem into a crisis: they triggered the first FAIR Plan assessment in more than 30 years and accelerated the state's Sustainable Insurance Strategy, which lets insurers use catastrophe models and reinsurance costs in rates in exchange for writing more in high-risk areas (california's home insurance crisis, The California FAIR Plan explained). For homeowners anywhere, the lesson is about limits: check your dwelling limit against a current rebuilding cost, carry extended replacement cost if you can, and keep a contents record off-site. What the January 2025 Los Angeles wildfires taught homeowners covers the details.