Wildfires Shaking Up Individuals, Business, Governments, and Fire Insurance Claims

Wildfires have increased drastically in recent years due to drought conditions. Wildfires have recently caused many billions of dollars in damage, and generated tens to hundreds of thousands of fire insurance claims made every year by individuals, businesses, and local governments. Below we describe some of these events and their impact.

Southern California Edison paid a $360 billion settlement to 23 cities, counties, and special districts to settle damage claims resulting from wildfires and debris flows resulting from efforts to extinguish the wildfires. The wildfires caused by Pacific Gas & Electric Company (PG&E) in 2017 – 2018 resulted in a $13.5 billion settlement with the victims which then had to be approved by the court prior to PG&E emerging from bankruptcy. The original liability estimate for damages caused by PG&E was $30 billion, which it compromised by entering bankruptcy. It previously settled with local governments for another $1 billion. The payout for these fire liability cases is expected to take up to ten years. One court recently held a church group liable for negligently starting a wildfire, causing $12 million in damage.

Insurance Issues

Many insurance companies will attempt to advance the “Act of God” fire insurance policy exclusion to avoid liability in cases where it believes its insureds were responsible for causing wildfires. In some cases, high winds and dry conditions cause fire-prone areas, which are than ignited by power line malfunctions due to intentional, negligent, and wrongful conduct. Another issue is the failure of many claimants during bankruptcy proceedings to put in a timely and required Notice of Claim to the bankruptcy court, which allows claimants to keep their claim active following the completed bankruptcy.

Besides disputing and denying claims, insurance companies are responding to the increased wildfire activity by raising premiums, canceling, or not renewing policies. This could have a devastating impact on California residents who, in the past years, have lost 800,000 homes to wildfires.

In response to this and to prevent further harm to its citizens, the California Insurance Commissioner declared, in December 2019, a one-year moratorium preventing insurers from declining to renew existing fire damage policies issued in certain areas in the state. Further, the moratorium prevents the cancelation of all fire damage policies throughout the entire state.


Dealing with wildfire liability can be extraordinarily complicated. If you are affected by this disaster, you should make a claim immediately and seek legal assistance from skilled legal counsel to ensure payment of your claim.

If you have any questions concerning fire insurance claims, give us a call and let our team help you.


Evan S. Schwartz
Founder of Schwartz, Conroy & Hack