California is expanding protections for wildfire survivors through new legislation addressing smoke damage, insurance claims, and financial challenges following the January 2025 Los Angeles wildfires.
On Sept. 15, Gov. Gavin Newsom signed four bills establishing new smoke damage testing standards and expanding mortgage relief for disaster-affected homeowners. Less than two weeks later, on Sept. 27, he signed Senate Bill 876, the Disaster Recovery Reform Act, which aims to improve how insurance companies handle claims following major disasters.
The laws respond to problems reported by survivors of the Eaton and Palisades fires, including disputes over smoke contamination, delays in insurance payments, and rising rebuilding costs. However, some protections will take effect over the coming years, raising questions about how quickly the changes will help homeowners still recovering.
“One of the hardest parts is that you’re doing it in the middle of a traumatic loss. So you have to learn this new system, and essentially a new language. It’s also a very long process, and so it takes a lot of grit, determination, and persistence to get through it,” said Emily Rogan, senior program officer at United Policyholders, a nonprofit organization that advocates for insurance consumers.
The legislation also addresses smoke damage in homes that survived the flames. According to the California governor’s office, more than 13,000 of the approximately 40,000 insurance claims filed following the Los Angeles wildfires involved smoke damage to standing homes.
Nearly 1 in 3 wildfire insurance claims involved smoke damage
More than 13,000 claims involved smoke damage in standing homes, out of approximately 40,000 insurance claims following the January 2025 Los Angeles wildfires.
Assembly Bills 1642 and 1795 established new protections related to smoke contamination, including standards for testing and remediation. The legislation aims to address inconsistencies in how insurers assess whether homes are safe for residents to return.
Rogan explained that even neighboring homes can experience different levels of smoke contamination.
“Smoke damage or standing homes can be almost trickier than total losses for quite a few reasons. In terms of the insurance claim process, how it should work is that every home is evaluated on its own. You want to make sure that every home is tested and determined if it’s safe and remediated,” Rogan said.
For insurance companies, the scientific reliability of smoke-damage assessments is a central concern.
“We want people to get the testing done and know that their homes are safe to go back to. But it has to be science-based. That’s really our main concern: to make sure that the people who are doing the testing are qualified and giving people the right information about their home so they can get back to them as soon as possible,” said Janet Ruiz, senior director of strategic communication at the Insurance Information Institute, an insurance industry-supported organization.
The Disaster Recovery Reform Act strengthens requirements for insurers handling disaster-related claims, including provisions intended to improve accountability and reduce delays. Some provisions begin taking effect in 2027, while others have later implementation dates.
“There’s a certain amount in the policy that covers your temporary rent as you can’t live in your house anymore because of smoke damage. But under your policy, you only have a set dollar amount for temporary rent to live somewhere else. If insurance is supposed to be your financial safety net after a disaster, those delays make it more difficult for someone to get back home, in a financially healthy way,” Rogan said.
Another challenge is underinsurance, which occurs when a homeowner’s coverage is insufficient to pay for rebuilding costs. According to Rogan, this can force survivors to take out loans, use their savings, or rebuild smaller homes.
“There’s usually a demand surge on contractors and building supplies. You can imagine how hard it is to find contractors and supplies when that many homes are lost,” Ruiz said.
The Disaster Recovery Reform Act also includes provisions addressing rebuilding coverage, including requirements to offer extended replacement cost coverage. These protections are intended to help homeowners avoid discovering that their insurance is insufficient after a disaster.
Alongside insurance reforms, AB 1842 and AB 1847 expand mortgage forbearance protections for qualifying disaster survivors. For eligible homeowners affected by the 2025 Los Angeles wildfires, the legislation extends the available mortgage relief from 12 to 24 months.
Forbearance allows homeowners to temporarily postpone mortgage payments, although the payments are not forgiven. This can provide financial flexibility while families are displaced and attempting to rebuild.
Rogan explains that mortgage obligations can create additional pressure because homeowners may still owe payments on properties they cannot occupy.
“Your mortgage company is also involved because you still have to pay your mortgage while you are rebuilding your home. That can be really difficult, especially in areas where rents can be very high, and when people are underinsured,” Rogan said.
However, financial assistance alone cannot address every challenge involved in rebuilding after a wildfire.
Nicholas Hinzo, an acting captain with the Redwood City Fire Department, has responded to several major California wildfires, including the Mad River Complex and Soberanes fires.
Hinzo emphasized the importance of restoring essential infrastructure during recovery, particularly when entire neighborhoods have been destroyed.
“There are many pieces of infrastructure that not only make a city work, but also have your neighborhood look like your neighborhood. It takes time, and there are plenty of procedures that have to be done before a house is rebuilt and power and water are turned back on, so the infrastructure is a big part,” Hinzo said.
Although the legislation addresses several challenges identified by wildfire survivors, some of the new protections will not apply retroactively to people already navigating the recovery process.
“They’re a really great step in the right direction. The hardest part is that many of the bills are not retroactive. Most of them go into effect at the beginning of the year, or something to that effect. Then from there, they can be helpful in the future,” Rogan said.