Construction costs surged in May at the fastest annual rate since the pandemic, compounding an already dire underinsurance problem for victims of the January 2025 Los Angeles wildfires.

As thousands of fire claims move from loss documentation into the rebuilding phase, counsel representing policyholders are increasingly encountering a common data point: insurers' replacement cost estimates that were outdated or incomplete at the time of loss.

With reconstruction bottlenecks now forcing these coverage gaps into the open, California Insurance Regulation Section 2695.183 has emerged as a critical tool in the practitioner's arsenal.

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