In the aftermath of the tragic wildfires in Los Angeles County, California’s Insurance Commissioner, Ricardo Lara, has emphasized that his top priority is to ensure victims have sufficient insurance coverage to recover and rebuild. “All eyes are on the insurance companies, and so are mine. I want consumers to know that we are closely monitoring the entire claims process to ensure they are protected,” said Commissioner Lara. Commissioner Lara recently issued several important bulletins and press releases addressing the state’s first-ever public insurance payment tracker, information about debris removal, and instructions to insurers to cover any mudslide or debris flow damage caused by the wildfires.
Coverage for floods and mudslides caused by Los Angeles County wildfires
On February 4, 2025, Commissioner Lara issued another notice to insurers doing business in California, acknowledging the serious risk of mudslides and flooding in areas impacted by the recent wildfires. The notice reminds insurers of their duty to comply with California’s “efficient proximate cause” doctrine and provide coverage for damages caused by mudslides or debris flow resulting from the wildfires. In 2018, a similar bulletin was issued by California’s former Insurance Commissioner, Dave Jones, following the Thomas fire and resultant mudslides in Santa Barbara County. Those mudslides claimed 23 lives and caused more than $421 million in property damage. For those impacted by the recent Los Angeles County wildfires, Commissioner Lara’s notice is a clear message to insurers that they will not be permitted to avoid coverage for mudslides or debris flow – causes typically excluded from a homeowners’ policy – when the facts demonstrate that the wildfires were the efficient proximate cause of the damage.
Debris removal directives
Commissioner Lara also issued a notice to insurers on January 30, 2025, stating his “expectation that insurance companies cooperate” with Los Angeles County’s 2025 Los Angeles Wildfires Debris Removal Program, which is intended to assist residential property owners with debris removal at no out-of-pocket cost to the property owner over and above any insurance coverage provided to that property owner for debris removal. Under the Debris Removal Program, if a policyholder had coverage for debris removal up to a specified amount at the time of the wildfires, the policyholder will authorize that amount to be remitted to the county, after which they will not be responsible for any further costs. If coverage for debris removal is not subject to a specified dollar amount or percentage, remittance to the county will be limited to the unused benefit amount (if any) in the debris removal coverage category after the residence is completely rebuilt, without any further out-of-pocket costs incurred by the policyholder. The Debris Removal Program is intended to apply regardless of whether the policyholder decides to rebuild at the same location, or purchases or builds a new home at another location.
Public consumer claims tracking system
Commissioner Lara recently created California’s first-ever claims tracker to “monitor claim amounts, payments and provide transparency.” The tracker data is compiled from admitted carriers, the California FAIR Plan, and surplus lines insurers. As of January 30, 2025, more than 31,000 insurance claims have been filed. Of those claims, more than 14,000 have been partially paid, totaling more than $4.2 billion in payments to date. Most of the unpaid claims include coverage for property damage and debris removal. Preliminary analyses are estimating that the total insured losses will range between $35 billion and $45 billion, which will make these wildfires by far the largest wildfire insurance industry loss in history.
Client Alert 2025-040
