A Recap of Recent Legislative Developments
Proposals that would have reduced utilities’ liability for wildfire losses did not move forward in Sacramento, as CalMatters reported. A narrower compromise, SB 492, left out the proposed limits on survivors’ non-economic damages and the elimination of insurance subrogation claims, but ultimately failed to receive a final Assembly vote, according to the same report. Several earlier proposals would have cut what utilities owe survivors after fires caused by their equipment. These proposed rules could also have limited what wildfire survivors, insurers, local governments, and others would be able to recover.
Governor Newsom and legislative leaders reached the narrower agreement after opposition from homeowners, insurers, and fire survivors, according to CalMatters reporting republished by Jefferson Public Radio. The compromise left out some of the more contentious elements of the governor’s proposal, as the report explains.
Why the earlier proposal raised concern
Supporters of the earlier proposal language argued that the new laws would stabilize utility finances, control electricity costs, and keep the state’s wildfire compensation system solvent. I don’t dispute that these are worthy policy concerns, and recognize that California’s investor-owned utilities have faced enormous wildfire liabilities. The issue is if we add new protections for utilities, who bears the costs?
CalMatters reported that early proposals tried to protect utilities from major payouts by capping subrogation, excluding certain damages, and pushing quick claim settlements. But homeowners, insurers, and wildfire survivors pushed back, warning that the policy would just pass the buck from utility companies to local communities.
I see what families go through after a wildfire, and how much their recovery depends on getting the compensation they need. That is why I think it is so important to stay close to proposed changes in the law and understand what they would mean for the people I represent.
Two proposals that didn’t make it
Lawmakers chose not to include two of the most contentious changes in the final draft. These include the elimination of insurance subrogation and limits on non-economic damages for wildfire survivors.
What is subrogation? If an insurance company pays a covered wildfire loss, it may then seek reimbursement from the party it believes caused that loss. There was a real threat that the California Legislature would shield utilities from these types of claims. Those proposed restrictions did not become law. According to public radio reporting, one reason was concern that doing so would further destabilize California’s already fragile insurance market.
I see keeping those restrictions out of the compromise as a positive development for wildfire survivors. That does not tell us what lawmakers will propose next.
Non-economic damages are real losses that affect people’s lives, not just legal terms for lawyers. They describe damages that are just as important as property damage, even if it is harder to ascribe a monetary price. These damages include emotional distress, disruption to family life, and the human toll that follows a catastrophic fire. For more on these damages, see my article “Zone of Harm.”
Despite the removal of some of these more contentious terms, the final compromise did not receive an Assembly vote before lawmakers adjourned on September 1, 2026, and therefore failed to become law.
What the narrower agreement would have included if passed
The narrower package that emerged from negotiations focused on a more limited set of changes, included restrictions on private-equity investment in wildfire claims, limits on short-term incentive compensation for certain utility executives, a cap on attorney fees in certain insurer-subrogation cases, and a “fast-pay” program for certain wildfire claims.
The executive-compensation provision would have denied short-term incentive compensation to specified senior executives for the fiscal year in which their utility caused a wildfire that damaged or destroyed at least 500 structures, and for the following fiscal year. The proposed attorney-fee cap would have applied to attorneys representing insurers in certain subrogation claims, not attorneys representing individual survivors.
I think restrictions on investment in claims should be considered separately from limits on survivors’ compensation. Those are different policy questions, and I do not want survivors’ rights lost in a debate about who can profit from their claims.
Had SB 492 passed, it would also have meant the appointment of a fast-pay administrator responsible for establishing claims procedures, settlement offers, and requirements for releases of claims. The final bill text did not specify a fixed dollar cap on individual fast-pay settlement offers.
A faster payment option may be useful for many people. Wildfire recovery is expensive, disruptive, and exhausting. Before accepting a fast payment, a survivor needs to understand what they are being offered and what rights they may be giving up in exchange.
Why this outcome matters
Much of the public discussion around this legislation focused on utilities, electricity rates, and insurer behavior. Those are important issues. But there is a risk in debates like this that the people most directly affected by wildfire loss start to disappear behind the policy language.
A wildfire survivor is not a line item. A family displaced from its home is not just part of a liability structure. When utility equipment causes a catastrophic fire, the legal system has to deal with money, but the underlying problem is human. That is one reason the reported decision not to cap survivors’ non-economic damages matters. It preserves room for the law to recognize harms that are serious even when they are not easy to quantify. It also matters that the narrower agreement would not have substantially changed how much utilities must pay after fires they cause.
That does not mean the result is perfect, and the question of whether utilities bear enough financial responsibility after fires has not gone away. It does mean that the final package was materially different from the version many survivors, consumer groups, and insurers had opposed.
The issue is not finished
So where does the failure of SB 492 to receive a final vote leave Californians? This is almost certainly not the end of the story, and the debate over these issues will continue.
Assembly lawmakers began follow-up hearings on October 20, 2026, with utility representatives continuing to press for changes to wildfire liability. At that hearing, Southern California Edison’s CEO urged lawmakers to reconvene in a special session, but there was no indication that a legislative solution was imminent, according to the same report. I try to avoid speculation, but I think it is safe to say that there is more to come.
My perspective
I represent wildfire survivors, so I come to it with the perspective of someone who has seen firsthand the challenges people face when a utility-caused fire damages their community. Beyond representing clients who have been impacted by wildfires, I am personally committed to making sure that the legal framework is a fair one. I think wildfire survivors deserve to have their interests represented when major policy changes are being negotiated behind closed doors. I volunteer my time to this cause, and have also contributed to efforts opposing proposals that I believe would limit the ability of wildfire survivors to pursue fair compensation. At the bottom of this page, I include links for ways you can get involved.
I will continue to follow the debate and review any new proposals as they emerge, and when there are developments to report, I will post here with new analysis. If you ever have questions about this or other wildfire law topics, I always welcome your call
Homeowner Rights and Wildfire Survivor Advocacy
| Organization | Who are they? |
|---|---|
| Every Fire Survivor’s Network Visit website |
A survivor-led organization connecting Eaton and Palisades fire survivors, sharing recovery resources, and advocating for insurance accountability and access to compensation. |
| Consumer Watchdog Visit website |
A consumer advocacy organization that has opposed restrictions on wildfire survivors’ rights to recover damages from utilities responsible for fires. |
| United Policyholders Visit website |
Provides free insurance-claim and recovery guidance, including workshops, sample letters, and resources to help homeowners understand their coverage and pursue available benefits. |
| Palisades Recovery Coalition Visit website |
A community-led recovery organization that brings residents’ concerns to public officials, supports rebuilding planning, and works to protect longtime property owners during recovery. |
Santa Barbara Wildfire Preparedness and Recovery Resources
| Organization | Who are they? |
|---|---|
| Santa Barbara County Fire Safe Council Visit website |
Helps residents reduce wildfire risk through home evaluations, home-hardening education, neighborhood chipping programs, and Firewise community support. |
| Santa Barbara Foundation: Community Disaster Relief Fund Visit website |
Supports local nonprofit disaster-response and recovery efforts, providing a way for community members to contribute to coordinated short- and long-term recovery. |