Subrogation in Wildfire Cases: How Insurers Recover Losses

Emily Lou Steenwyk

February 24, 2025

Wildfire Subrogation: How Insurers Recover Losses in California

California’s wildfire seasons have intensified, with the January 2025 wildfires becoming one of the most destructive in the state's history. These fires burned over 16,000 structures, caused 29 fatalities, and displaced more than 200,000 residents.

For insurers, the financial toll is staggering—billions of dollars in claims paid to policyholders. However, when a third party’s negligence contributes to a wildfire, insurers can seek subrogation to recover losses.

This article explores when insurers can sue third parties for wildfire damages, legal challenges in subrogation, and how expert witnesses strengthen claims.

What Is Subrogation in Wildfire Insurance Claims?

Subrogation is a legal process that allows an insurer to recover claim payouts from a third party responsible for causing the loss.

In California wildfire cases, subrogation enables insurers to:

Identify responsible parties – Such as utility companies, contractors, landowners, or manufacturers.
Prove liability – Showing negligence, violations, or equipment failures that caused the fire.
Recover financial damages – Reimbursing insurers for property damage, business interruption, and suppression costs.

By pursuing subrogation, insurers reduce financial losses and hold negligent parties accountable.

When Can Insurers Pursue Subrogation for California Wildfires?

Insurers can only file subrogation claims when credible evidence shows that a third party’s negligence contributed to the wildfire. Below are common liability scenarios in California.

1. Utility Company Negligence

Electrical failures are one of the leading causes of wildfires in California. Insurers may sue utility providers if:

Power lines, transformers, or faulty equipment sparked the fire.
Neglected maintenance led to downed power lines or sparks.
Regulatory violations occurred, such as failing to follow wildfire mitigation plans.

Example: Pacific Gas & Electric (PG&E) has paid over $25 billion in wildfire settlements after power line failures ignited multiple wildfires.

2. Construction and Contractor Negligence

Heavy machinery, welding, and excavation can ignite fires when contractors fail to follow safety protocols. Subrogation claims may apply when:

Equipment use lacked fire prevention measures, such as spark arresters.
Operations continued despite high-risk fire conditions, such as Santa Ana winds.
Land clearing and controlled burns were mismanaged.

3. Property Owner and Land Management Liability

Private landowners and government agencies can be held liable for failing to mitigate fire risks. Common claims include:

Failure to remove dry vegetation, creating a fire hazard.
Negligent controlled burns that escalated into wildfires.
Non-compliance with California’s Fire Hazard Severity Zone laws.

Example: The Palisades Fire in January 2025 in Southern California was linked to poor land management, resulting in lawsuits against local agencies and private landowners.

4. Product Liability – Defective Equipment & Vehicles

Manufacturers can be liable if defective products cause or contribute to wildfires. Subrogation may apply when:

Generators, appliances, or electrical tools overheat and ignite flames.
Vehicles spark fires due to mechanical failure or faulty exhaust systems.
Fire suppression systems fail, allowing a small fire to spread.

Example: Several California wildfires have been traced to vehicle-related sparks, leading to subrogation claims against auto manufacturers.

Challenges in Subrogation for California Wildfires

Proving causation – Requires expert forensic analysis to establish a direct link between negligence and the wildfire.
Comparative negligence – Defendants may argue natural causes or extreme weather played a role.
Government immunity – Some agencies have legal protections, making claims difficult.
Complex litigation – Wildfire subrogation often involves multiple defendants and requires expert testimony.

Example: After the Maui wildfires in 2023, insurers were barred from pursuing independent subrogation due to a $4 billion settlement covering all claims collectively.

To overcome these hurdles, insurers need forensic experts to build strong cases.

How Expert Witnesses Strengthen Wildfire Subrogation Cases

Wildfire subrogation requires expert testimony to prove liability and maximize recoveries. The following expert witnesses are essential:

Fire origin and cause experts – Identify the fire’s source and contributing factors.
Electrical and utility experts – Investigate power line failures, transformer issues, and utility company negligence.
Construction and engineering experts – Assess contractor safety violations and fire code non-compliance.
Environmental and forestry experts – Analyze fire spread patterns and land management practices.
Financial and economic experts – Calculate total damages, including property losses and business interruptions.

With expert analysis, insurers can strengthen their claims and recover losses from liable parties.

Need a Top-Tier Expert Witness for Your Wildfire Subrogation Case?

Subrogation in wildfire cases requires forensic expertise and expert testimony to prove liability and maximize financial recovery. ForensisGroup connects insurers and litigators with highly qualified, court-tested experts.

Customized expert selection – Specialists in fire forensics, electrical engineering, and wildfire litigation.
Over 30 years of experience – Trusted by insurers and legal teams for complex litigation.
Comprehensive litigation support – From forensic investigations to expert witness testimony.