The California Department of Insurance, under the leadership of Commissioner Lara, has filed an Order to Show Cause against the California FAIR Plan, accusing it of systematically denying wildfire smoke damage claims in violation of state law—specifically California Insurance Code §790.03, which prohibits unfair claims practices. The investigation revealed at least 418 violations, including misrepresenting policy terms, failing to conduct fair investigations, and improperly rejecting valid claims. PropertyCasualty360+4Property Insurance Coverage Law Blog+4PropertyCasualty360+4
The FAIR Plan has long required smoke damage to result in visible and “permanent physical damage” before paying out, a policy the Department found to be unlawful. After a hearing, Commissioner Lara may impose cease-and-desist orders, monetary penalties (up to $10,000 per willful violation), and force the FAIR Plan to reform its coverage and claims handling. en.wikipedia.org+15Property Insurance Coverage Law Blog+15California Department of Insurance+15
Consumer advocates report that many homeowners were left to clean up toxic smoke residue themselves, often after exposure to dangerous particulates like soot. In response, the Department has created a Smoke Claims & Remediation Task Force to establish statewide standards for testing and repairing smoke-contaminated properties. Claims Pages+5Property Insurance Coverage Law Blog+5California Department of Insurance+5
