Gov. Gavin Newsom pressures insurers and lenders over delayed wildfire recovery funds

Governor Gavin Newsom warned insurance companies and mortgage lenders to stop delaying or denying insurance payouts to survivors of the 2025 Los Angeles wildfires, including the Eaton and Palisades fires. He sent letters to banks, credit unions and mortgage lenders highlighting reports of unnecessary red tape that slows the release of escrowed insurance funds during rebuilding.

Newsom directed the Business and Consumer Services Agency and the Department of Financial Protection and Innovation to collect complaints about delayed or denied payments and cautioned that such practices may violate consumer‑protection laws. He also warned insurers not to use the CAL FIRE Damage Inspection (DINS) database as a basis for refusing claims, and said the state insurance commissioner is conducting a market‑conduct examination that could lead to penalties for companies such as State Farm.

“[…] we would like to come in and help ensure that there is a robust enforcement action that’s taken against State Farm,” said Joy Chen, executive director of the Every Fire Survivor’s Network. The move follows ongoing difficulties for more than 11,000 homes damaged or destroyed, where survivors cite delayed insurance payouts as a major barrier to rebuilding.