Why this article is important: When a home is destroyed by wildfire, insurance companies are often slow to assist. A new law holds insurers to higher standards when responding to homes destroyed resulting from a state of emergency.
Coverage without a list of contents lost
Following the widespread destruction of the 2025 LA-area wildfires, legislatures are getting ahead of the next disaster — by making improvements to insurance payouts.
When a home is declared a total loss due to a state of emergency, homeowners are often unable to access the property to provide proof of loss due to safety reasons. Further, homeowners rarely keep an itemized list of contents, a real problem for insurance when everything is destroyed.
These realities came to a head following the Los Angeles wildfires of early 2025, when thousands of structures were completely destroyed and homeowners were left with a shortage of coverage, which was also difficult to access.
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A new law requires insurers to provide greater payouts, and allows an extended timeline for providing proof of loss following a state of emergency.
Without an itemized list of contents lost, the new law requires insurers to provide at least 60% of the personal property policy coverage limit, up to $350,000. [Calif. Insurance Code §10103.7(b)(1)]
Further, homeowners now have up to 100 days following the loss to submit proof of loss to the insurer. [I C §2051.5(b)(3)(A)]
Prior to the change, when a home was declared a total loss, homeowners were required to produce an inventory list along with proof of loss within 60 days of the loss. Further, without a list, the coverage limits were typically capped at just 30% of the primary structure limits, or $250,000.
Bulking up insurance data
The new law also requires insurers with premiums of at least $50 million to annually submit a report to the Insurance Commissioner on reinsurance rates. Reinsurance occurs when an insurer transfers the risk of the insurance policy to another insurer, ultimately allowing the primary insurance company to issue more policies, as the risk of loss is shared. [I C §937.1(a)(1)]
The author of the new law calls this change part of a “sustainable insurance strategy.” Understanding how insurers are interpreting and preparing for large disasters will equip legislatures to prepare responses to future disasters — and keep homeowners meaningfully insured.
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Homeowner insurance premiums aren’t so bad here in California — but coverage is hard to find
