News Summary
Governor Gavin Newsom has called on the California FAIR Plan Association to expedite the handling of smoke damage claims from the January wildfires. He raised concerns over the FAIR Plan’s practices and the high volume of complaints regarding claim handling. The recent court ruling against the FAIR Plan’s smoke-damage policy has revealed significant irregularities, prompting Newsom’s request for prompt resolution and accountability. Many homeowners continue to face challenges in receiving compensation for their losses amid ongoing scrutiny of the FAIR Plan’s policies and practices.
Los Angeles, CA — Governor Gavin Newsom has called on the California FAIR Plan Association to expedite the processing of smoke damage claims related to the January wildfires. In a letter addressed to the organization, Newsom emphasized the need for fair and prompt resolution of these claims, following a recent court ruling that highlighted significant irregularities in the FAIR Plan’s practices.
Over 200 complaints have been filed with the California Department of Insurance by policyholders who experienced difficulties with claim handling, revealing systemic issues within the FAIR Plan. In response, Newsom expressed serious concerns about the organization’s “unscrupulous and unfair” practices, which may be in violation of state law.
The FAIR Plan, serving as California’s insurer of last resort, has been overwhelmed with nearly 5,000 claims since many private insurers have withdrawn from the state’s insurance market. This surge in claims has placed additional pressure on the FAIR Plan, which expects to disburse around $4 billion in total for fire-related claims.
A recent ruling by a Los Angeles County Superior Court judge declared that the FAIR Plan’s smoke-damage coverage policy violated state insurance law. The ruling highlighted that the organization unfairly distinguished between types of damage, which is against the requirements set forth in California’s standard fire insurance policy. Furthermore, the judge termed the FAIR Plan’s reliance on a “sight and smell test” to assess visible damage as unreasonable, stating that homeowners should have the right to utilize laboratory tests to verify smoke damage.
The California Insurance Commissioner, Ricardo Lara, has issued a cease-and-desist order against the FAIR Plan, emphasizing the illegal practices regarding smoke damage assessments. Despite this order and the court ruling, complaints continue to pour into the Department of Insurance, indicating ongoing issues in claim processing.
Survivors of the January wildfires have voiced their frustrations regarding the delays and denials tied to smoke damage claims. Many of these individuals report significant challenges in receiving compensation they were promised under the terms of their policies. The FAIR Plan has acknowledged these concerns, stating that it is in the process of updating its smoke damage policies and that payments have begun to be distributed to some policyholders.
Critics have raised alarms about the FAIR Plan’s approach to categorizing certain smoke damage as “cleanable,” rather than providing adequate coverage for homes contaminated by smoke. This practice is viewed as a serious issue by advocates, who argue that it fails to address the hazardous contamination that can result from smoke damage.
Since its inception in 2017, the FAIR Plan has included a provision that limits coverage for smoke damage, a point that has consistently drawn ire from policyholders. Investigations have surfaced numerous instances where claims for smoke damage were improperly denied or limited, particularly concerning homes that suffered from toxic exposure.
The implications of the recent court ruling are deemed significant for California’s insurance landscape, likely affecting how future smoke damage claims are assessed. Thousands of homeowners affected by the wildfires remain in limbo, awaiting rightful compensation as bureaucratic processes continue to unfold.
The FAIR Plan was initially designed to offer emergency coverage options for homeowners who could not secure insurance from traditional private insurers. However, as many residents now find themselves dependent on the FAIR Plan in the wake of increasing wildfire risks, the system’s integrity and responsiveness are under intense scrutiny.
As the situation develops, Governor Newsom’s advocacy for rapid resolution of smoke damage claims underscores the urgent need for accountability and fairness in the insurance system, especially for those who have already endured significant losses due to California’s perilous wildfire seasons.
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Governor Newsom Urges FAIR Plan to Expedite Smoke Damage Claims
Additional Resources
- Los Angeles Times
- Wikipedia: Wildfire in California
- San Francisco Chronicle
- Google Search: California insurance smoke damage
- ABC7
- Encyclopedia Britannica: Insurance
- NBC News
- Google Scholar: California wildfires insurance
- JD Supra
- Google News: California wildfires claims
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LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
