A recent Pepperdine School of Public Policy study 1 confirms something wildfire survivors already know all too well: rebuilding after a catastrophic wildfire takes time. Whether your home or business was completely destroyed or suffered wildfire particulate damage, like smoke, soot, ash, and heavy-metal impaction, the Pepperdine researchers confirmed that recovery takes far more time than insurers expect or acknowledge. In many communities studied, rebuilding stretched well beyond five or six years. Recovery is uneven, slow, and rarely follows a straight line.
To its credit, California law has started to recognize that reality. For covered losses tied to a declared state of emergency, insurers cannot impose a deadline shorter than 36 months for homeowners to complete repairs or rebuilding in order to recover full replacement cost benefits. (Ins. Code § 2051.5(b)(1)–(2)). I posted about this almost a year ago, when some carriers started making large payments to policyholders, explaining how those payments can “start the clock” with respect to rebuild or repair decisions. And when delays are outside the homeowner’s control, such as frequent permitting backlogs, contractor shortages, or materials delays, insurers are required to grant extensions in most situations.
The same is true for Additional Living Expense (ALE) coverage. For wildfire losses related to a state of emergency, ALE must be paid for at least 24 months, with mandatory extensions up to 36 months when the policyholder is acting in good faith but still can’t rebuild through no fault of their own. (Ins. Code § 2060(b)(1)). Further extensions may also be required for good cause. Of course, a key consideration for most policyholders isn’t always time, but whether they’ve exhausted their benefits.
But statutes only tell part of the story. Many of my clients spend months — sometimes longer — simply trying to process what happened before they can make decisions about whether to rebuild, how to rebuild, or whether rebuilding even makes sense. And for homeowners whose houses didn’t burn, the decisions can be just as agonizing: how to deal with smoke, ash, and contamination when the science is evolving, and experts don’t always agree.
Insurance companies want speed. Recovery demands patience. Real rebuilding for these families, both physical and emotional, doesn’t happen on an insurer’s preferred timeline, and the law only reflects a portion of that truth.
1 Burned, Sold, and Rebuilt? The long road to recovery after California wildfires. (Jan. 2026) Pepperdine Univ. and Beacon Economics.
