AXE CONSTRUCTION INC · CSLB Lic #1069232 · Class B General Building · Licensed and insured since 2020 · Verify our license
A total-loss fire claim pays for a rebuild in stages: advances for living expenses and contents, an actual cash value payment on the home, then the replacement cost balance as you rebuild, within the dwelling coverage limit plus any extended replacement cost and ordinance or law coverage. This guide walks through each stage, the California rules that protect wildfire survivors, and where claims get stuck.
AXE CONSTRUCTION INC · CSLB Lic #1069232 · Class B General Building
Axe Construction is a licensed general building contractor, not an insurance company, public adjuster or law firm. This page is general information. For questions about your policy, call your carrier or the California Department of Insurance hotline at 800-927-4357.
Most policies pay in two parts. Actual cash value is the replacement cost minus depreciation for the age and condition of the old house, and it is paid once the total loss is confirmed. The withheld depreciation, called the replacement cost holdback, is paid when you incur the cost to rebuild or replace. Extended replacement cost and ordinance or law coverage sit on top of that and are paid the same way. Reading the first check as the full value of the claim is the most common mistake families make in the first ninety days.
The scope of loss is the carrier’s line-by-line estimate of what it will cost to rebuild your home, usually produced in estimating software with a quantity and a unit price for every component. Two things make it worth a careful read. First, it was often written at pre-fire, pre-code pricing: Spectrum News reporting on Palisades claims found carrier estimates near $400 per square foot while contractor bids ran several hundred dollars higher. Second, it frequently leaves out items a real rebuild cannot skip: general conditions and contractor overhead, soils and geotechnical reports, the wildfire code assemblies, sewer connection where a septic system must be abandoned, and the demand surge that comes when thousands of homes rebuild at once.
An insurance scope is a contract too. I read it against the lot and the building code before anyone picks a floor plan, so the homeowner knows where the numbers land before they commit.
We put the scope next to a line-item estimate for your actual lot and plan, mark every gap, and give you a document you can hand to the adjuster. We are contractors, not public adjusters or attorneys for your claim, and we cannot change what the policy covers; what we can do is make sure the two numbers are compared early rather than discovered late.
Ordinance or law coverage pays the increased cost of rebuilding to current building codes. After the 2025 fires that is a large number, because the 2025 California Wildland-Urban Interface Code, in effect since January 1, 2026, requires a Class A roof assembly, ember-resistant vents, ignition-resistant or noncombustible exterior walls, enclosed eaves and tempered multi-pane windows, and the energy code adds solar and electrical requirements the old house never had. California law requires building code upgrade benefits to be paid whether you rebuild on the same site, rebuild elsewhere or buy, so this coverage should never be left on the table. Check the declarations page for the limit; it is usually a percentage of the dwelling coverage, and it is the first number we look for in a scope review.
The California Department of Insurance restated these in Bulletin 2025-2 on January 23, 2025, for the Los Angeles fires. They come from the Insurance Code and apply to total losses in a declared disaster:
Insurance Code sections 2051.5, 2060, 2061, 675.1 and 10103.7 are the sources. The Department of Insurance takes complaints at insurance.ca.gov and 800-927-4357.
The policy does not force the decision. Under California law the full replacement cost benefits travel with you if you rebuild elsewhere or buy, and many families weigh that against the fee programs, like-for-like rules and property tax base that favor rebuilding on the same site. Our Los Angeles fire rebuild page covers the City and County rules, and our cost guide covers what a rebuild costs. If you are still deciding, a scope review costs nothing and gives you the number both paths start from.
First 30 days:
First 90 days:
Founder Tomer Fedida is a licensed California attorney and the qualifying general contractor on CSLB License #1069232. He earned his law degree at Loyola Law School and spent 14 years in Los Angeles real estate development before leading Axe Construction. On an insurance-funded rebuild that training shows up in two places: the scope of loss, which is read like the contract it is, and the construction contract, which is written so the payment schedule matches how the carrier releases funds and nothing is left vague. Axe Construction does not provide legal services; it builds with the fine print already read.
Most construction disputes start in the contract, not on the job site. I went to law school before I became a contractor, so every agreement we write spells out scope, allowances, change orders and the schedule in plain terms. When nothing is left vague, there is nothing to argue about later.
Learn more about Axe Construction, or verify our license at cslb.ca.gov.
You report the loss, the insurance company assigns an adjuster and a claim number, and you request a complete copy of the policy. The carrier pays advances for living expenses and contents, then an actual cash value payment on the dwelling. The replacement cost balance is paid as you rebuild or buy, within the policy limits and the time the law allows.
Advances for living expenses and contents are due on request after a total loss in a declared disaster. The dwelling payment comes in stages: an actual cash value check once the loss is confirmed, then replacement cost as costs are incurred. California gives you a minimum of 36 months from the first actual cash value payment to collect the full replacement cost.
The insurance company pays; it does not build. You hire the contractor, and the carrier pays the covered cost up to the dwelling limit plus any extended replacement cost and ordinance or law coverage. In California you may also use the full replacement cost benefits to rebuild elsewhere or buy an existing home.
Accept the undisputed amount; it does not close the claim. What you should not accept is a final settlement before a contractor has read the scope of loss against your lot and the current building codes. A first offer written at pre-fire pricing without general conditions, code upgrades or demand surge is the starting point of the conversation, not the end.
Do not guess. If you are asked when something was built, what it cost or what caused damage, say you will confirm and provide documents. Do not say the home was in poor condition, do not describe upgrades as repairs, and do not sign anything marked final or full settlement until the scope has been reviewed. Keep every conversation in writing where you can.
The scope of loss is the carrier’s line-by-line estimate of what it will cost to rebuild your home, usually prepared in estimating software. It lists every component with a quantity and a unit price. It is the document your rebuild budget starts from, and the one a contractor should read against the lot and the building codes before design begins.
Under California law, after a declared state of emergency you have no less than 36 months from the first actual cash value payment to collect full replacement cost, with extensions for good cause. Permit programs have their own dates: LA County generally requires like-for-like applications within two years of the January 7, 2025 declaration.
Not immediately. After a total loss in a declared disaster, California requires the insurer to offer to renew the policy for at least the next two renewal periods, no less than 24 months. Separately, the Insurance Commissioner has issued moratoriums on non-renewals in ZIP codes within or adjacent to the fire perimeters.
A public adjuster is licensed by the California Department of Insurance and works for you, for a percentage of the recovery. Some families benefit, particularly on underinsured or disputed claims. Read the public adjuster contract carefully, confirm the license, and understand that a contractor’s scope review is free and often answers the first question: how big is the gap?
Yes. California Insurance Code section 2051.5 lets you rebuild at a new location or purchase an already built home and still receive the full replacement cost benefits, including building code upgrade and extended replacement cost coverage, and the value of the land at the new location cannot be deducted.
Not for the advances or the actual cash value payment, but you need one before the replacement cost is settled. A written, line-item contractor estimate that reflects local conditions and current building codes is the evidence that moves a carrier estimate, and it is the number your rebuild will actually cost.
Lost a home in the Palisades, Eaton or another Los Angeles fire? Call (323) 729-3140 or Schedule a rebuild consultation through our contact page. Bring the scope of loss and the declarations page. We will read them against your lot and the current code and show you where the numbers land before you commit to anything.
AXE CONSTRUCTION INC · CSLB Lic #1069232 · Class B General Building
8383 Wilshire Blvd, Suite 363, Beverly Hills, CA 90211 · (323) 729-3140