Judge Rules California FAIR Plan’s Restrictive Smoke Damage Policy Unlawful

Pasadena homeowners whose property suffered smoke damage during the Eaton Fire in January got a big win in court last week when a Los Angeles County Superior Court judge ruled against the California FAIR Plan’s restrictive smoke damage policy.

According to media reports, a Los Angeles County Superior Court judge ruled the California FAIR Plan violates the law by providing less coverage than is required by the state’s fire insurance requirements. The issue emanates from the way the plan covers smoke damage.

“Their position for years has been that these homes impacted by wildfire smoke damage are not damaged, they’re dirty. And they told people to clean them up themselves,” the homeowners’ attorney Dylan Schaffer said in April. “That advice is not just illegal under California law, it’s also dangerous because these houses are toxic.”

Schaffer said these repairs could often cost tens of thousands of dollars because they may involve replacing insulation, flooring, drywall and more.

The FAIR Plan is a state-mandated association of all property insurers that offers basic fire coverage to homeowners who cannot obtain insurance in the voluntary market.

A number of homeowners affected by the wildfires sued the FAIR Plan, claiming it has been difficult to get paid for damage. The Eaton Fire destroyed over 9,400 structures, primarily homes, across Altadena and Pasadena, with more than a hundred of those in Pasadena. Many of the homeowners were underinsured or carried coverage from the private insurance program.

The FAIR Plan administrators have commented on the judge’s ruling, stating that it is reviewing the decision and are unlikely to pursue an appeal, as they are already in the process of updating their policy language.