One year ago this week, the Eaton and Palisades fires tore through Los Angeles County, leaving a trail of destruction that would become the costliest wildfire disaster in American history. Today, as survivors mark the grim anniversary, a sobering reality has emerged: the physical fires may be out, but for tens of thousands of families, the financial nightmare is just beginning.

The Human Cost, One Year Later

The statistics paint a portrait of a recovery that has barely begun:

  • 65% of Altadena residents remain in temporary housing
  • 75% of Pacific Palisades residents are still displaced from their homes
  • 79% of survivors report facing financial hardships
  • 50% say they have depleted much or all of their savings

A January 2026 survey by Department of Angels, a nonprofit established to assist fire victims, reveals the profound toll on survivors. Nearly half worry about their mental health, and Black, Asian, and Latino survivors are disproportionately falling behind on rent or mortgage payments.

"We lost everything—our home, our photos, our children's baby books," said Maria Gonzalez, an Altadena resident whose family has been living in a cramped apartment since the fires. "The insurance company promised us they'd make us whole. Instead, we've spent a year fighting over every dollar."

The Insurance Battle

Insured losses from the LA wildfires are estimated at approximately $30 billion, while total economic losses—including longer-term latent damages—could exceed $250 billion. But getting insurance companies to pay has proven to be a struggle that rivals the fires themselves.

State Farm, California's largest home insurer, reports it has paid over $5 billion to more than 13,500 affected customers. The FAIR Plan, California's insurer of last resort, has handled about 5,400 claims and paid almost $3.5 billion. Yet satisfaction with these payouts remains low.

Investigations and Legal Action

California's insurance department is investigating State Farm's response to the fires and has taken legal action against the FAIR Plan over its handling of claims, particularly those related to smoke damage. Customers of both insurers report being the most dissatisfied with their insurers' response compared to those with other carriers.

Common complaints include:

  • Delayed payments: Many homeowners report waiting months for initial claim payments
  • Underpayment disputes: Insurers offering settlements far below replacement costs
  • Smoke damage denials: Widespread rejection of claims for homes affected by smoke but not flames
  • Contents valuation battles: Disputes over the value of personal belongings lost in the fires

The Perfect Storm That Created the Disaster

The conditions that led to the wildfires represent a climate-driven perfect storm. In February 2024, Los Angeles recorded its heaviest rainfall since 1988, spurring explosive growth of vegetation across hillsides and canyons. What followed was the driest 10-month period in over a century.

When 100-mph Santa Ana winds arrived in early January 2025, the tinder-dry vegetation became fuel for fires that spread across densely populated areas with terrifying speed. The combination of factors—extreme rain followed by extreme drought, combined with fierce winds—created conditions that overwhelmed firefighting resources.

The Broader Insurance Crisis

The LA wildfires have intensified California's already severe insurance crisis. Major insurers, including State Farm, Allstate, and Farmers, had already announced plans to reduce coverage in California or exit certain markets entirely before the fires struck.

The aftermath has only accelerated this trend:

  • Premium increases: Homeowners renewing policies report premium increases of 30% to 50% or more
  • Coverage reductions: Some insurers are reducing wildfire coverage limits or adding exclusions
  • Non-renewals: Thousands of homeowners are receiving non-renewal notices, forcing them to the FAIR Plan
  • FAIR Plan strain: The state's last-resort insurer has seen its exposure grow dramatically, raising questions about its financial stability

What Survivors Can Do

For those still battling with insurance companies, experts recommend several strategies:

Document Everything

Keep detailed records of all communications with your insurer, including dates, names of representatives, and summaries of conversations. Follow up phone calls with written confirmation.

Get Independent Estimates

Don't rely solely on your insurer's estimates for repair or replacement costs. Obtain independent contractor estimates to support your claim.

Consider a Public Adjuster

Public adjusters work on behalf of policyholders rather than insurance companies. While they charge a percentage of the settlement, they often recover significantly more than homeowners negotiating alone.

Know Your Rights

California law requires insurers to process claims in a timely manner and act in good faith. If you believe your insurer is acting unfairly, file a complaint with the California Department of Insurance.

Seek Legal Help

For complex or high-value claims, consulting with an attorney who specializes in insurance disputes may be worthwhile, particularly if your insurer denies your claim or offers a settlement you believe is unfair.

Looking Ahead

As California enters another fire season, the lessons of the LA wildfires remain painfully relevant. For survivors, the anniversary serves as a reminder that recovery is measured not in months but in years—and that having insurance is no guarantee of being made whole.

For the rest of us, the disaster underscores the importance of understanding our insurance coverage, documenting our possessions, and preparing for the possibility that even the most comprehensive policy may leave gaps when disaster strikes.

The LA wildfires were a preview of the insurance challenges that climate change will increasingly bring. How California—and the nation—responds will shape the financial security of homeowners for generations to come.