California Insurance Commissioner Bulletin 2025-2: Consumer Protections for Wildfire Survivors

California Insurance Commissioner Bulletin 2025-2: Consumer Protections for Wildfire Survivors

In the aftermath of the devastating Palisades and Eaton wildfires, the California Department of Insurance has issued Bulletin 2025-2, aimed at ensuring that survivors of these fires receive their rightful insurance benefits swiftly. Insurance Commissioner Ricardo Lara emphasized that immediate claims payments are crucial for recovery, particularly for those affected by the recent wildfires in Southern California.

Key Protections for Wildfire Survivors

1. Advance Payments for Total Losses According to California insurance law, survivors whose properties have suffered total loss due to these fires are entitled to certain advance payments.

   • Additional Living Expense (ALE) Advance Payment: Policyholders are entitled to an advance of at least four months' living expenses to help cover the cost of temporary housing and other living expenses. Learn more about ALE.

   • Contents Without Inventory: If the residence was furnished, insurers must offer an advance payment of at least 30% of the policy limit for personal property (contents), without requiring a detailed inventory. Details on this payment.

2. Rebuilding and Relocation Rights Wildfire survivors who decide to rebuild or relocate after a total loss are entitled to full benefits under their policy, including:

   • Full replacement cost, even if rebuilding occurs at a new location.

   • No deductions for the value of land at the new location. Learn more.

3. Time Limits for Claims

   • Full Replacement Cost: Policyholders have a minimum of 36 months to collect the full replacement cost of their property after an emergency, with possible extensions. Details here.

   • Additional Living Expenses (ALE): ALE coverage lasts for a minimum of 24 months, with extensions for delays due to reconstruction challenges. Read more.

4. Policy Renewal After a declared disaster, insurers are required to offer policyholders a renewal for at least the next two renewal periods, ensuring continued coverage. Learn about this requirement.

Immediate Action Needed by Insurance Companies

Commissioner Lara has urged insurance companies to expedite the determination of total losses and the processing of advance payments. Some insurers have already implemented these measures, but others are lagging behind. The Insurance Department expects swift action to ensure policyholders can recover as soon as possible.

Additionally, some survivors have reported misinformation from insurance adjusters about their coverage options. This includes claims that policyholders choosing to rebuild or relocate may lose certain benefits, such as building code upgrades and coverage for land value at a new location. These claims are incorrect according to California law, and the Department is working to address this issue.

For further details, insurers and policyholders can refer to the full bulletin and related state insurance codes on the California Department of Insurance website. Read the full bulletin here.

Conclusion

As California continues to battle the effects of wildfires, survivors need to be aware of their rights to advance payments and full coverage under state insurance laws. The California Department of Insurance is committed to ensuring that insurers uphold these protections, helping victims recover more quickly. For assistance, policyholders can contact the department or visit the Department of Insurance's website.