Not exactly answering your questions, but from what I remember with 911 is that insurers are insured themselves whose insurers get insured themselves, etc. So in the end, it's the whole insurance industry who carries the burden when big events like this happen.

After that, the answers to your questions likely depend very strongly on the specifics of each contract. But I will be interested to see what the general trend will be...

Do I have to put the proceeds of the payout back into replacing my destroyed property? Or do I have the freedom to do whatever I want with the money?

As a related note, what does this tweet mean?

Is this "100% of the cost" dependent on having insurance or is everyone 100% covered no matter if they had insurance or not? What happens after 6 months?

I figure with these questions there is a "here's how it's supposed to work" answer and a "here's how it really works" answer, and I'm definitely more interested in the latter.

To answer your questions. 1- Your payout will be determined by the precise wording of your policy. Read it carefully.

2- Payouts for large events can take years to settle...especially when the reinsurers are having to pay out large sums. Climate change has already put the insurers and reinsurers under huge pressure.

3- Most insurers use reinsurers to cover large events like natural disasters...so it is the reinsurers who are called upon to pay most of a large claim event. Governments may be forced to contribute toward settlement of large claims events...especially given the stressed situation many reinsurers are already in as a result of climate change.

Large events such as the California fires are very likely to result in higher future insurance premiums for many people including people not directly affected by this event.

Insurance is becoming increasingly unviable in many cases due to climate change.

Due to the reality of climate change natural disaster insurance is going to become increasingly expensive and in many cases unaffordable if not unobtainable.

The Libertarians who deny climate change perhaps do not realise how this will affect the highly financialised economy of most western liberal democracies who have all become increasingly dependent upon debt funded unproductive property price speculation.

Without Insurance the neoliberal FIRE (finance, insurance real estate) economy implodes.

i've seen a few things pop up that suggest a lot of people wont be getting payouts

gpt summary

California faces an insurance crisis as wildfires devastate Los Angeles, particularly the fire-prone Pacific Palisades. State Farm recently withdrew coverage from many homes, leaving residents reliant on the overburdened state-backed FAIR plan, which is struggling to cover escalating losses. With thousands of properties destroyed and rebuilding costs often exceeding insurance payouts, homeowners are left financially vulnerable as insurers retreat from high-risk areas.

Recent regulatory changes aimed at stabilizing California's insurance market are being tested by the severity of these fires. Experts warn that without systemic solutions, the state risks an uninsurable future, with climate-driven disasters making insurance both less accessible and less affordable.