Fire survivors have looming deadline to sue insurers
Nearly 21 months after the Palisades and Eaton fires destroyed thousands of homes, attorneys are warning Southern California wildfire survivors that they may have less than three months to protect their legal rights against their insurance companies. During a recent webinar for fire survivors presented by the nonprofit Every Fire Survivors Network, insurance litigation attorneys Shant Karnikian and James Lee urged policyholders to review their claims and consult an attorney well before Jan. 7, 2027, which they identified as the conservative deadline for filing lawsuits against insurers arising from the Jan. 7, 2025, fires.
The attorneys cautioned that survivors who miss the deadline could lose their ability to pursue claims for unpaid benefits or alleged insurance bad faith, regardless of the merits of their cases. The warning comes as many survivors continue to navigate complicated insurance claims while rebuilding their lives. Since the fires, residents have been forced to find temporary housing, replace essential belongings, document losses, negotiate with insurers, hire contractors, and navigate government agencies — a process that has consumed countless hours and, for many, remains unfinished.
Moderator Larry Midler, a Palisades Fire survivor emphasized that missing a legal deadline could have serious financial consequences for families already struggling to recover.
California insurance policies typically contain contractual deadlines for filing lawsuits, often one year from the date of loss. Attorneys explained that courts have applied a legal doctrine known as equitable tolling in certain circumstances, potentially extending the period. However, they cautioned that the interaction between that doctrine and California’s statutory protections for declared disasters remains uncertain.
Their advice: Do not assume ongoing negotiations, additional inspections, or promises of future payments will protect your right to sue.
Insurance attorneys warned disaster survivors that they should not assume their claims are safe from a statute of limitations simply because their insurance companies are still processing payments or have not formally closed their files. They also emphasized that policyholders may have grounds for a lawsuit even while insurers continue to pay portions of their claims. The distinction is critical for survivors still fighting for smoke-contamination remediation, rebuilding costs, and additional living expenses. “The fact that they haven’t formally said, ‘We’re done,’ doesn’t mean that your claim is not ripe for a lawsuit,” one attorney explained.
Attorneys discussed whether policyholders could negotiate additional time through a tolling agreement, which pauses or extends the period in which a lawsuit may be filed. Although such agreements can be possible, they warned survivors against relying on an adjuster’s verbal assurances.
Instead, policyholders may wish to consult an attorney to determine whether a properly drafted written agreement can protect their rights. The attorneys also stressed that survivors do not necessarily need to wait until an insurance company officially denies a claim before seeking legal advice. Insurers have obligations to investigate claims reasonably and thoroughly and to handle them within required time frames. Prolonged delays, disputes over legitimate contamination reports, and forcing homeowners to pay thousands of dollars for investigations that should reasonably have been handled by the insurer can raise questions about whether the company has breached its contractual or good-faith obligations.
Underinsurance presents another potential legal issue. If an insurance broker or agent failed to obtain the coverage a homeowner requested, a policyholder may have a claim against that professional though an applicable limitation period may depend on when the harm was discovered or reasonably should have been discovered.
Other insurance deadlines also matter. California law provides disaster-related extensions for certain additional living expense benefits, including a potential extension to 24 months, although policy limits still apply. Homeowners generally have 36 months from the first actual cash value payment to recover eligible replacement-cost holdbacks, subject to applicable policy terms and legal requirements. Survivors should also review deadlines for contents advances and other benefits rather than assuming that an ongoing rebuilding process automatically preserves their rights.
The attorneys acknowledged that filing a lawsuit can be intimidating, particularly for homeowners worried about losing coverage or facing retaliation from their insurers. But they argued that policyholders who believe their claims have beenimproperly handled should understand their options before time runs out.
A lawyer evaluating a potential case will generally need to examine the insurance policy, payment history, statements of loss, claim file, applicable coverage limits, and evidence of the damage. That investigation takes time making it unwise to wait until the final weeks before a potential deadline, especially when that deadline is during the holiday season.
Consulting a lawyer does not automatically mean filing a lawsuit. Attorneys said initial consultations are often offered without charge by lawyers who handle cases on a contingency-fee basis, although survivors should confirm the terms and understand when representation officially begins.
Nor does filing suit necessarily mean going to trial. Some insurers negotiate once litigation begins. Other cases require more extensive legal action.
The attorneys’ central message was that homeowners should not assume an unresolved claim will remain viable indefinitely. An early legal review can help survivors understand their options, preserve their rights, and make informed decisions about pursuing the benefits they paid for.