California Insurance Commissioner Ricardo Lara has taken legal steps against the California FAIR Plan Association over how it handled claims for smoke damage from recent wildfires. The California Department of Insurance filed an order to show cause, responding to complaints that the FAIR Plan denied or limited these claims based on a strict requirement for “permanent physical damage.”
This action comes after a long investigation that found at least 418 violations of California’s consumer protection laws tied to the FAIR Plan’s claim handling. According to Lara, the FAIR Plan misrepresented policy terms, failed to fairly investigate claims, and denied legitimate claims without a good reason.
Wildfire survivors have been struggling to get proper compensation for smoke damage, which sometimes isn’t as visibly obvious as fire damage but can still cause serious health and property issues. To address this, the Department of Insurance created a Smoke Claims & Remediation Task Force to set clear standards for investigating and fixing smoke damage claims across the state.
In another related matter, the CDI is also looking into State Farm’s handling of wildfire claims in Los Angeles. This review will check if State Farm followed California’s rules for fair claims handling. Wildfire survivor groups have raised concerns about how some insurers, including State Farm, are dealing with smoke damage claims.
This legal move against the FAIR Plan highlights growing frustration among Californians about how insurance companies respond after wildfires. As fires become more common and severe, the way insurers handle these claims is under close watch to make sure survivors get the help they deserve.