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2d ago

Court Rules California FAIR Plan Must Cover Smoke Damage Claims

Revising its policy to broaden smoke damage coverage, the FAIR Plan has accepted the ruling without planning an appeal.

A smoke-damaged bathroom is seen off of English Hills Road after the LNU Lightning Complex fire tore through Vacaville on Aug. 24, 2020.
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Overview

  • A Los Angeles County Superior Court judge ruled the FAIR Plan illegally restricts coverage to smoke damage that is visible or detectable by smell.
  • The decision covers thousands of claims dating back to 2012, including roughly 3,000 filed by victims of January’s Los Angeles wildfires.
  • FAIR Plan spokesperson Hilary McLean said the insurer removed the ‘sight and smell’ test last year and has collaborated with regulators to clarify its smoke damage language.
  • The Department of Insurance is investigating the plan’s practices following its 2022 market conduct exam; Commissioner Ricardo Lara also formed a Smoke Claims & Remediation Task Force.
  • Homeowners could see substantial additional payments, with legal advocates estimating the ruling may unlock millions for underpaid smoke damage claims.