Palisades Fire Victims Face Insurance Battles as State Lawmakers Push for Reform

Families devastated by the Palisades Fire are facing a new challenge—this time, with their insurance providers. Many homeowners say they’re only receiving a fraction of what their policies promised, compounding the pain of losing their homes.

NBC’s Nick Watt spoke with victims like the Spivaks, who say State Farm—California’s largest insurer—has only paid out half of what they were insured for. “They’ll only give us 30% of personal property and 50% of dwelling,” the couple shared. While the payout limits are technically legal, fire survivors describe the experience as emotionally and financially draining.

“You have to deal with your insurance company—we call it the disaster after the disaster,” said attorney Michael Childress, who represents homeowners filing lawsuits against their carriers. Stories of uneven treatment are common: some homeowners with insurers like AIG or Chubb reported smoother payouts, while others are left fighting tooth and nail for every dollar.

Many homeowners also say they’re receiving inaccurate reports stating they worked with building consultants—despite never having done so. The goal, some allege, is to wear policyholders down. “Their whole goal is to exhaust you and deplete you and have you give up,” one homeowner said.

Adding to the burden, victims are often asked to submit an exhaustive list of everything lost—right down to green plastic strainers and hot plates—with only 60 days to complete it. “You miss a ton of things,” said one homeowner who lived in her house for 25 years. “There was pressure to get through it quickly.”

In response, California legislators are drafting a bill that would eliminate the need for these detailed inventories and require insurers to pay interest on delayed payouts once funds are sent to mortgage providers.

While the proposed reforms may offer relief in the future, they come too late for many families affected by the Palisades Fire. As one homeowner put it: “We paid insurance every month for 25 years for the rainy day. And the rainy day came. Please pay us what we're owed.”

Explore: NBCPalmSprings.com, where we are connecting the Valley.