The Small Business Administration (SBA) has issued a final extension of loan disbursement deadlines for Los Angeles wildfire survivors. The agency cited ongoing insurance claim disputes and permitting delays as reasons borrowers have been unable to access approved funds.
The extension gives approved borrowers 24 months from their loan authorization date to draw down funds, up from the standard six-month window. It is the third extension the SBA has issued since the January 2025 fires. Previous extensions came in October 2025 and January 2026.
SBA has approved more than $3.4 billion in disaster loans for nearly 13,000 Los Angeles borrowers. That total represents more than half of all disaster assistance the agency delivered nationwide in fiscal year 2025.
SBA Administrator Kelly Loeffler said survivors "deserve to rebuild their lives and homes." She said the agency expects local permitting officials and insurers to resolve the delays that have slowed recovery.
Permit approvals in the City and County of Los Angeles have nearly doubled to about 6,500 since February 2026, according to the SBA. The increase followed a February 2026 executive order directing federal agencies to address rebuilding obstacles in the city.
The SBA has also introduced a Builder Self-Certification option for disaster loan borrowers. The option is intended to let approved borrowers continue rebuilding despite local permitting delays.
Insurance claim disputes have remained a persistent obstacle to rebuilding. A January 2026 survey commissioned by the nonprofit Department of Angels polled 2,443 adults in fire-affected communities. It found that nearly 8 in 10 insured respondents reported serious problems with their insurers.
Separately, the advocacy group United Policyholders found that 62% of total-loss survey respondents said their coverage was insufficient to rebuild or replace their home. Another 33% said they did not know whether they were underinsured.
Los Angeles County opened a civil investigation into State Farm General Insurance Co. in late 2025. The inquiry examines whether the insurer's claims practices violate California's Unfair Competition Law and reviews its use of artificial intelligence in claims adjusting. State Farm had paid more than $5 billion to California wildfire policyholders by that point.
California's Department of Insurance filed an enforcement action against State Farm in May 2026 that cited 398 violations across 220 sampled claims. The action seeks a license suspension of up to one year. The advocacy group Every Fire Survivor's Network found 70% of insured Eaton and Palisades survivors reported delays, denials, or underpayments across all insurers.
California's FAIR Plan, the state's insurer of last resort, has paid out $2.7 billion across more than 5,000 wildfire-related claims. That left the plan with an $800 million deficit. Industry-wide insured losses are estimated at $23 billion for the Palisades Fire and $17 billion for the Eaton Fire, per Gallagher Re.
State lawmakers introduced the Make it FAIR Act in early 2026 to add transparency and governance requirements to the FAIR Plan. The bill followed a December 2025 report from California's insurance regulator that found systemic failures in the FAIR Plan's operations after the 2025 fires. The insurance industry has warned that expanded coverage requirements could increase costs without adequate reserves.
