Regulator starts task force to address denials of LA fire smoke claims

Following a June 24 LA Superior Court ruling against the California FAIR Plan for illegally denying wildfire smoke damage claims, the state's insurance commissioner has created a Smoke Claims and Remediation Task Force.

The advocacy group Consumer Watchdog also responded to the ruling, issuing a guide to getting smoke damage claims paid, with advice from survivors of the January 7 Eaton fire. The Eaton Fire Survivors Network sent the insurance commissioner 51 testimonials about State Farm failing to meet claims obligations for smoke damage. According to Eaton Fire Residents United, all 165 homes tested for smoke damage showed elevated levels requiring remediation.

On June 12, insurance commissioner Ricardo Lara announced a probe of State Farm's handling of claims from the LA fires. The commissioner's office stated that the new task force will recommend science-based insurance standards and best practices for safely returning to homes.

California law requires insurers to provide fire coverage equal to or better than the state's standard policy, without excluding smoke damage or "nonpermanent damage," a statement by Consumer Watchdog noted. Historically, almost 40% of claims related to California wildfires are underpaid, according to a 2023 study by the Federal Reserve Bank of Philadelphia.

The task force will make recommendations to the commissioner and other California officials "within months," according to a press release announcement. These will include standards for fair treatment for consumers exposed to wildfire smoke. The task force will also examine the health impacts of smoke and smoke damage as part of setting testing and remediation standards.

Amy Bach of United Policyholders and Karen Collins of the American Property Casualty Insurance Association are among the 13 members appointed to the task force.