Overview

• Los Angeles County Superior Court Judge Stuart Rice determined the FAIR Plan’s restriction to damage detectable by sight or smell violates state law mandating coverage for all losses by fire.
• The ruling applies to claims dating back to 2012 and is expected to affect thousands of homeowners, including about 3,000 victims of recent Los Angeles wildfires.
• FAIR Plan officials say they dropped the “sight and smell” test last year and do not plan to appeal the decision as they work with the Department of Insurance to revise policy language.
• The California Department of Insurance found 59 instances in which smoke damage claims were wrongly limited or denied and is investigating the FAIR Plan’s handling of recent wildfire losses.
• Insurance Commissioner Ricardo Lara has convened a task force to develop uniform statewide standards for investigating and paying smoke damage claims.