An LA Wildfire Victim Seeking Feedback

Hey everyone! We are very early into this journey, but I wanted to reach out and get some feedback here as we start what is sure to be a very long and stressful process.

Our house was recently lost in the wildfires ravaging Los Angeles. We are currently out of town for work, so we are safe, but are heartbroken for our friends and neighbors. I'm seeing quite a financial headache going forward, as well as a probable large large loss of money.

Our house was purchased at 1.5m in June of 2024. It was in a very very desirable neighborhood that was rapidly trending upwards price-wise. We put in $500,000, our mortgage lender covered 1m. (I know these numbers probably look eye watering to some- I get it.)

Getting fire coverage in CA right now is really hard. We finally found a policy that would agree to a repair and replace policy that if there was a fire they would cover rebuilding the dwelling for the cost of $650,000. (What they assessed rebuilding our smallish and modest 3br historical home would cost). We found one other company that gave us the same quote. We went with it. It has all of the other standard coverage- personal belongings, paying for a place for us to live while we rebuild, etc.

Little did I know I would be needing that policy 6 months later.

So....now we rebuild? I'm assuming that will take a few years, and our lender will have to have some input on it.

We can't really "rebuild" what made this house special enough to get into a bidding war in the first place. Tile from the 1920s. Original hardwood floors. Original fireplace. Original builtins. Original moldings and craftsman windows. Views of now fire ravaged mountains.

We still owe almost a million dollars (aagghhhhhhhhhhh) on a mortgage. Assuming the lender and ourselves can agree to a plan to rebuild that takes a few years. Then what? I can't imagine that house we rebuild will ACTUALLY be worth the same amount as the original one was. Maybe the area will rebuild and we can sell a few years later, but we won't possibly sell for more than we paid for it right? And in the meantime we're paying a crazy mortgage on a house we aren't living in. And who knows if the neighborhood will actually be a place people are living in then.

Does anyone have any rose colored glasses that will help me see this just not leading to us being out about $500,000? We were very solidly "middle class stretching upwards" in Los Angeles Industry terms, so that is a LOT of money for us. Our dream before the fire was we were going to sell in a few years once my wife's job there ended and buy a small place closer to family in New England.

Any thoughts, or things my dumb creative brain has missed, would be welcome.