Homeowners Battle for Billions to Rebuild a Year After LA Fires

Many Los Angeles residents are facing a difficult reality as they recover one year after the Eaton and Palisades blazes killed 31 people and charred almost 40,000 acres. Rebuilding is possible, but only for those who can negotiate deals, absorb losses or take on risk. Even then, the money often doesn’t add up. As the toll of the devastation comes into clearer view, disputes over who will bear the cost are escalating. Insured losses from the Jan. 7, 2025, fires that burned for three weeks totaled $40 billion, making them the most expensive catastrophe in the world last year, according to insurer Swiss Re AG. A March report from the University of California at Los Angeles estimated that total property and economic losses may be as high as $131 billion. Governor Gavin Newsom contends the federal government owes the state $34 billion in disaster relief. “California has been and will continue to fight for these communities,” Newsom said in an emailed statement. “We will not walk away.” Bloomberg News Los Angeles Bureau Chief John Gittelsohn joins Bloomberg Businessweek Daily to discuss. He speaks with Carol Massar and Tim Stenovec.

As an inferno roared toward her California home last January, Pauline Ching didn’t have time to grab family photos or her Chinese jade and ivory antiques. The house where she had raised her children and welcomed grandchildren soon became a statistic: one of more than 16,000 structures destroyed in the costliest wildfires in US history.

A year on, Ching is among the first homeowners to begin rebuilding in Altadena, the Los Angeles suburb ravaged by the Eaton Fire. She persuaded almost half of the 54 homeowners in her gated community to hire a single contractor, securing bulk discounts and faster permit approvals out of reach for many neighbors.

Still, the rebuild will cost Ching about $350,000 more than her insurance will cover. To close the gap, she has joined a class-action lawsuit against utility Southern California Edison, whose power line is suspected to have sparked the blaze.

“My situation is better than a lot of others,” Ching, 69, said from the home of her 96-year-old mother, where she’s staying while awaiting her house’s completion. “But once I got to the bottom line, I saw it costs a lot more than my insurance is covering. And there are things I lost that you can’t put a price on.”

Ching’s experience captures the difficult reality of LA’s fire recovery one year after the Eaton and Palisades blazes killed 31 people and charred almost 40,000 acres. Rebuilding is possible, but only for those who can negotiate deals, absorb losses or take on risk. Even then, the money often doesn’t add up. As the toll of the devastation comes into clearer view, disputes over who will bear the cost are escalating.

Insured losses from the Jan. 7, 2025, fires that burned for three weeks totaled $40 billion, making them the most expensive catastrophe in the world last year, according to insurer Swiss Re AG. A March report from the University of California at Los Angeles estimated that total property and economic losses may be as high as $131 billion. Governor Gavin Newsom contends the federal government owes the state $34 billion in disaster relief.

“California has been and will continue to fight for these communities,” Newsom said in an emailed statement. “We will not walk away.”

As climate change makes natural disasters more destructive and frequent, the LA fires show how risks and liabilities spread beyond burned neighborhoods to renters, electric ratepayers, insurers, municipalities and utility shareholders. Companies are lobbying and litigating to limit their exposure or shift losses elsewhere. And the long-term health costs from exposure to smoke and toxins are still unknown.

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