When Diane Hvolka’s home burned down in January, the real estate attorney didn’t lose just her Pacific Palisades residence but a link to her teenage daughter, who died two years ago.
The tragic loss of her only child — whose room she had left untouched — has left her determined to rebuild on her Glenhaven Drive property. But so far, Hvolka said, she’s been stymied by the California FAIR Plan, from which she bought coverage last year after her insurer of more than a decade suddenly dropped her.
“I want to be on the land where my daughter grew up,” said Hvolka, 47, who said she was promised a $550,000 check from the insurer in early February that has yet to arrive. “This is so frustrating. I’ve been chasing them ever since.”
That Hvolka had to buy a policy from the state’s troubled home insurer of last resort after losing her insurance was hardly unusual, according to a Times analysis of FAIR Plan and California Department of Insurance data.
The Times found that in the Palisades and Eaton fire zones, the FAIR Plan’s rolls shot up last year a combined 47%. From 2020 to 2024, the number of homes in both areas on the plan nearly doubled from 14,272 to 28,440.
That exceeded, according to the Times analysis, a 40% growth in policies issued statewide last year by the plan, an association of insurers licensed to write home insurance policies in California.
For many victims of the L.A. wildfires, it was the only available insurance: Four ZIP Codes in the fire-affected zones enrolled more than a third of their households in the state plan. But the backup insurance has not lived up to its promise, drawing numerous complaints among policyholders about delays in payments and other issues.
In 2024, there were 19,171 households on the FAIR Plan in the Palisades fire zone, up 51% from 12,659 households in 2023. The zone is defined by 26 ZIP Codes in and adjacent to the fire perimeter subject to a moratorium issued by Insurance Commissioner Ricardo Lara after the fire, which has blocked insurers from canceling or not renewing policies.
The lot, center, where the home of Diane Hvolka stood before it was destroyed by the Palisades fire.
(Eric Thayer / For The Times)
In the Eaton fire zone, there were 9,269 households on the FAIR Plan last year, up 37% from 6,756 households in 2023. The zone includes 31 ZIP Codes in Altadena and nearby communities also within and adjacent to the fire’s perimeter that are subject to Lara’s moratorium on cancellations and non-renewals.
The surge in the state plan’s rolls last year doesn’t surprise Joshua Morey, president of J. Morey Co., a Cypress insurance brokerage with Los Angeles County offices, who said he has witnessed the growth on the ground.
The announcement by State Farm General in May 2023 that it would stop accepting new applications for business or personal property coverage in California, followed by a March 2024 decision that it would not renew some 72,000 residential and commercial property insurance policies, seemed to set off a flight of other insurers from the market, leaving homeowners with few choices, he said.
“State Farm has the largest market share. They see State Farm leaving, everyone is going to follow,” said Morey, who testified before the Legislature in January.
The Times analysis found that insurers exited not only wildfire-prone areas but neighborhoods where that wasn’t the case. Eighty-nine percent of the ZIPs in the fire moratorium neighborhoods were considered negligible to low fire risk by insurance companies.
After the fires, State Farm announced it would offer renewals to all Los Angeles County policyholders whose policies had not expired as of Jan. 7, but that still left thousands of county households on the FAIR Plan, which has been sharply criticized over how it handles fire claims.
Earlier this month, 10 Palisades and Eaton fire victims sued the FAIR Plan, State Farm and nine other large insurers, alleging that they failed to properly investigate and remediate claims for smoke damage, even though the homes were uninhabitable.
And last week, another group of local fire victims sued multiple California insurers, citing a “nefarious conspiracy” to eliminate competition and force homeowners onto the plan.
Hilary McClean, a FAIR Plan spokesperson, declined to comment on the ongoing litigation but said the plan “pays all covered claims, including smoke claims, consistent with California law and its policy forms, which are approved by the California Department of Insurance.”
She added that the plan relies on its “independent adjusters to make recommendations based on what they perceive at a loss location” in accordance with state law.
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An insurance crisis
The FAIR Plan was established by the Legislature in 1968 to offer basic insurance in urban and fire-prone neighborhoods where it was not available. It was not meant to be a large participant in the state’s home insurance market, but a string of disastrous wildfires over the last decade has spooked private insurers.
That left the FAIR Plan with about 556,000 homeowner policies as of March, up from about 235,000 in September 2021, according to its website, making it one of the state’s biggest home insurers and exposing it to large losses. It also had nearly 18,000 commercial policies.
The FAIR Plan said it has received about 5,280 claims for damage caused by the Palisades and Eaton fires, and has paid more than $2.5 billion to policyholders. The plan expects that the Jan. 7 fires will cost it an estimated $4 billion.
That has prompted it to seek a $1-billion bailout from its member carriers. Half of that sum might be paid by surcharges on home policies statewide under a policy adopted last year by Lara to stabilize the plan’s finances. He has been sued by a consumer group over the matter.
Diane Hvolka is determined to rebuild on her Palisades lot.
(Eric Thayer / For The Times)
Slow response
Multiple neighborhoods in Pacific Palisades saw a sharp rise in the number of households on the FAIR Plan, but Topanga Canyon stands out.
The canyon has long been a community where it has been hard to get home insurance. It is densely vegetated and bisected by a lengthy, curvy and narrow thoroughfare that makes egress challenging. Already by 2020, 70% of its households in the 90290 ZIP Code were in the FAIR Plan, a figure that steadily rose to 86% last year — the highest percentage in either fire zone, the Times analysis found. Five percent of households were not renewed in 2023.
Although the canyon and its roughly 2,200 homes in the ZIP Code avoided devastation, the Palisades fire still damaged or destroyed 70 structures, the fifth-highest level of destruction in both fire zones.
Jaspreet Katrib, 52, and her husband are in some ways typical Topanga Canyon homeowners. They bought their 5,600-square-foot hilltop home, where they live with their son, five years ago. And they have been FAIR Plan policyholders ever since.
Their Betton Way home survived the blaze, but it is uninhabitable. Fire damaged their property, including their exterior electrical wiring and water lines, while flames licked at their walls and smoke infiltrated the interior, Katrib said.
The couple paid for their own environmental testing, which found soot, ash, char and other contaminants throughout the house, according to a copy of the report reviewed by The Times.
Earlier this month, the couple received a $48,356 payment from the plan, which included $31,153 to repair their pool, but did not account for the other exterior damage — and left them less than $20,000 to do all the remaining work.
The FAIR Plan’s settlement calls for the couple to clean rather than replace their insulation, but three private contractors they contacted said it must be removed. All the bids topped $100,000 to remediate the property, with one for $160,000, Katrib said.
“It’s been a very emotional experience for us — an emotional roller coaster. It takes days or weeks to get any type of response from the FAIR Plan. And the most difficult thing is we are not even in our home,” she said.
Hvolka lives in Marquez Knolls, just north of Palisades Village in the 90272 ZIP Code, which saw the number of homes in the FAIR Plan nearly quadruple from 360 households in 2020 to 1,430 homes in just four years, the Times analysis shows.
About 17% of households in the postal code were on the plan as of last year. It is one of 11 ZIP Codes in the fire zones with more than 10% of households on the plan.
Hvolka’s ZIP Code experienced Pacific Palisades’ worst losses during the fire, with 5,525 structures destroyed or suffering severe damage, according to Cal Fire damage reports and inspections.
Hvolka purchased her four-bedroom, 2,990-square-foot home in 2011, and for years was covered by insurer CSI. When she was notified last spring that her policy would not be renewed, she called around to every insurer she could think of and enlisted the help of a broker — to no avail.
“The big names — State Farm, Triple A, Mercury, all of them. I did everything,” Hvolka said, before being forced onto the FAIR Plan, which she heard had happened to many of her neighbors.
Hvolka was able to afford only $1.1 million in insurance for her dwelling, $110,000 for her swimming pool and $275,000 in extended coverage, all of which could be used to rebuild. But with contractor costs inflated by the fires, she figures it won’t be enough, even with a $500,000 low-interest SBA loan she was able to secure — and a decision to downsize to 2,000 square feet.
Hvolka is thankful the state plan promptly paid her $300,000 for her belongings and additional money for living expenses, but would like to get all of her other insurance money soon so she can start contacting contractors. Her fiance will cover the gap in construction costs.
“I notice a lot of signs of contractors that are doing work. I don’t feel confident enough that they’re gonna pay me in order to hire someone … at this point,” Hvolka said. She is determined to overcome any obstacles because of her late daughter’s ties to the property. “I can never picture anyone else living there.”
Maral Donoyan and Wilmer Harris have the unwanted distinction of living in the 91001 ZIP Code in Altadena, which experienced the worst devastation of any postal code in the Eaton or Palisades fire zones, with 9,123 structures either damaged or destroyed, according to Cal Fire.
The ZIP Code has nearly 1,000 homeowners on the FAIR plan, roughly 7% of the neighborhood. From 2020 to 2024, the number of homeowners on the plan increased by 43%.
The couple, both attorneys, said they ended up on the FAIR Plan after Mercury Insurance did not renew their fire coverage last year despite their cutting back foliage and making other improvements to fire-harden the property, where they live with their son, a recent college graduate.
Failing to pay for smoke damage
Their home on Luna Court in the upscale La Vina development in northwest Altadena survived the fire, but a nearby street was devastated. Their garage partially burned, window seals melted and their home was infiltrated by smoke and ash, they said.
“It smelled like the inside of a barbecue pit after a long day of barbecuing,” said Harris, 61, after returning to the 3,900-square-foot house.
What happened next stunned them. They said the insurer refused to conduct environmental testing or remediate the smoke damage, suggesting they call the cleaning company Molly Maid.
The couple, now in their third Airbnb, has since taken out a Small Business Administration loan for more than $200,000 so they can pay for their own cleanup. They also have retained the same law firm that sued the state plan this month over its smoke-damage remediation policies.
“The night of the fire we left thinking we had insurance coverage,” said Donoyan, 59. “There was nothing that jumped out at us as to what a crazy ride we were about to take.”
