In a decision with broad implications for victims of January’s wildfires, the state’s home insurer of last resort is on the hook to pay for smoke damage claims, according to a court ruling issued this week.
The California FAIR Plan said it would likely not appeal the Tuesday ruling.
The ruling from Los Angeles Superior Court Judge Stuart Rice said the FAIR Plan violated state law in how it treats all smoke damage claims. Rice wrote that “evidence might exist” to show that the plaintiff was underpaid for his smoke damage claim, but that the “unlawful language” used by the FAIR Plan made it difficult to assess — a common complaint made by others looking for remediation help.
The FAIR Plan in a statement issued to Southern California News Group on Wednesday, June 25 said the statewide carrier’s “burn damage and smoke damage claims” are now being handled consistent with California law.
California Department of Insurance spokesman Michael Soller said that “full and fair payment of wildfire claims to consumers is a top priority.”
He said the CDI, which regulates the FAIR Plan, is investigating how the insurance provider is handling smoke damage claims. “The department aims to resolve consumers’ complaints and help get people back on their feet as they recover their lives. This ruling strongly supports our ongoing efforts,” Soller said in the statement.
The state agency uses multiple tools to enforce compliance with state law, including letters, bulletins and market conduct exams. In May, a letter was sent to the FAIR Plan with background on the agency’s enforcement record, making two demands of FAIR:
- Amend its dwelling policy and “investigate claims fairly.”
- Investigate claims in a “reasonable manner.”
The Tuesday ruling, which buttresses the CDI’s enforcement demands, stems from a lawsuit filed by a Lake Tahoe resident in 2021 in which plaintiff Jay Aliff, who was denied a smoke damage claim, said his riverfront cabin…
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