California’s Department of Insurance recently issued a press release announcing that insurers have paid $22.4 billion to wildfire survivors. 1 On its face, that is a staggering amount of money. It should be based on everything that I have personally seen.

Large catastrophes require large responses. Communities do not recover on good intentions. They recover when money flows quickly and meaningfully to the people who lost homes, businesses, and a sense of normalcy. In that respect, the announcement highlights an important truth insurance professionals and regulators sometimes forget. Prompt payment of substantial portions of a claim is not a courtesy. Instead, prompt and full payment is the expectation and the lifeblood of community recovery.

There is no question that early and significant payments matter. Many insurance carriers advertise about their fast and empathetic response following large catastrophes. Families cannot rebuild without funds. Local economies cannot restart when residents are displaced indefinitely. Contractors, tradespeople, schools, and small businesses all depend on insureds having money in hand, not promises of future reimbursement. From that perspective, the number itself tells a powerful story about insurance as a social product. It works best when carriers move quickly and do not nickel and dime policyholders at their most vulnerable moment.

But reading the press release carefully, what stands out just as much as what is said is what is not. The $22.4 billion figure is presented as if it is close to the finish line, when in reality it is a snapshot taken mid-race. It reflects payments made so far, not the ultimate cost of these wildfires. It does not tell us how much remains unpaid, how many claims are still being adjusted, or how many policyholders will ultimately discover that coverage limits fall short of real-world rebuilding costs. Big numbers can create the impression that the problem is largely solved, even when many insureds are still living in rentals or temporary housing, wondering whether their coverage will truly make them whole.

Another counterintuitive aspect is the repeated emphasis on the percentage of claims that have been “partially or fully paid.” Partial payment sounds reassuring until you remember that partial payments are often mandated advances. California law requires early payments for contents and living expenses. Those payments are important and necessary, but they are not the end of the claim. Many policyholders will later confront disputes over scope, pricing, code upgrades, smoke contamination, debris removal, and time limits on additional living expenses. None of that complexity shows up in a headline percentage.

The press release also reads less like a neutral status update and more like a victory lap. The framing subtly suggests that the California Department of Insurance deserves congratulations for forcing insurers to play by the rules. Oversight is important. Enforcement of the law is essential. But doing the job the law requires is not extraordinary performance; it is the baseline expectation. Regulators are not supposed to be cheerleaders for themselves, seeking a pat on the back. They are supposed to be referees, especially when the stakes involve people who have lost everything.

What is also missing is any meaningful discussion of the strain this catastrophe places on the insurance market itself, particularly the FAIR Plan and insurers facing assessments and future rate pressure. Those realities matter to professionals trying to understand what comes next and to consumers who will face higher premiums and fewer coverage options down the road. Recovery dollars today often translate into affordability battles tomorrow. Pretending otherwise does not help anyone prepare.

None of this diminishes the importance of the money already paid. Quite the opposite. It reinforces why the insurance product is so important as a social product, why delays are so damaging, and why regulators should remain vigilant long after the press conferences end. Communities recover when claims are paid fully, fairly, and without unnecessary friction. They falter when statistics are used to signal closure before the hard work is completed.

The real measure of success will not be how large the number looks in a press release, but whether families are back in permanent homes, businesses are operating again, and policyholders feel that the promise they bought was actually kept. The California Department of Insurance and its commissioner have a lot more work to do. That story will take years to tell and not congratulatory headlines to announce.

Thought For The Day

 “The true test of leadership is how well you function in a crisis.”
— Brian Tracy

1 $22.4 Billion in Insurance Payments are Leading Source of Multifaceted Recovery in Los Angeles, Cal. Dept. of Ins. (Dec. 31, 2025). Available online at https://www.insurance.ca.gov/0400-news/0102-alerts/2025/$22-4-Billion-in-Insurance-Payments-are.cfm (Last accessed, Jan. 2, 2026).