Will California homeowners relocate or rebuild? Both are costly

Tens of thousands of California residents will be forced to decide whether to permanently relocate or face construction bills after a wildfire crisis that’s weakened California’s insurance.

Tens of thousands of California residents will decide whether to permanently relocate or rebuild their homes after the most destructive fires in Los Angeles’ history. Insurance companies may cover thousands of dollars in temporary housing and living expenses — unless homeowners are underinsured or not covered. “The policy is generally going to cover the cost of additional living expenses while you are out of your home, to maintain what is kind of your usual standard of living,” said Karen Collins, the vice president of American Property Casualty Insurance Association’s property and environmental division. For example, if someone’s insurance covers $100,000 for a property, the insurance company might cover another $20,000 — or 20% — in additional living expenses, Collins said. Peter Vanek, president of PVRK, a Southern California-based real estate consulting company, said his home was destroyed by a battery fire in 2023. His insurance initially estimated $350,000 for the house. After Vanek provided evidence of what was lost, his insurance paid twice as much, including living expenses while he relocated, and the house was rebuilt. Insurance coverage plays an outsized role in the decision to move or invest resources into reconstruction. For some with insurance, it could boil down to having pictures of the property before the damages and updating insurers with home estimates.