Insurance Companies Under Fire Over Smoke Damage Claims

Altadena homeowners whose structures survived the Eaton fire but suffered interior smoke damage are facing challenges with insurance claim denials. During a Special Altadena Community Meeting on Monday, March 10, officials addressed growing frustration over these disputes.

Deputy Commissioner of the Consumer Services and Market for the California Department of Insurance Anthony “Tony” Cignarale noted that some insurance companies have been denying claims, citing recent court decisions. Cignarale said that the court decisions do not justify blanket denials.

The Department of Insurance issued a bulletin to insurers, reminding them of their obligations to inspect damage and process claims properly, regardless of external assessments like damage survey reports, Cignarale said.

LA County Board Supervisors Chair Kathryn Barger also spoke about the issue of insurance coverage being denied due to improper use of damage assessment reports. These reports are limited to external walkarounds and were never intended to qualify or disqualify residents for aid. Insurers are required to conduct their own inspections and reports.

The lack of standardized remediation protocols complicates matters further. Cignarale explained that different segments of the industry have varying standards for testing and cleanup procedures, with no statewide standards agreed upon

Homeowners have also reported difficulties with temporary housing coverage, including low financial limits and six-month limits. Mary Safaryan, Consumer Affairs Representative at Los Angeles County Department of Consumer Affairs, told the gathering that that price gouging protections limit new rental contracts to 10% increases through April 8, 2025, and recent amendments restrict security deposits to one month’s rent in most cases.

The Department of Insurance encouraged affected residents to attend a workshop at John Muir High School on Saturday, where experts and representatives from about 10 insurance companies, including the California Fair Plan, would be available to address questions and resolve issues.

For immediate assistance, emergency eviction protections are available for qualified income-eligible tenants from February 1 through July 31, with tenants having 12 months to repay rent after the resolution expires. The Los Angeles County Household Relief grants deadline is March 12, making it urgent for affected residents to apply.

Residents experiencing claim denials were encouraged to file formal complaints with the Department of Insurance for further investigation.