California could be first in the nation to create smoke-damage standards

Two smoke-damage bills awaiting the governor’s signature address a longstanding issue brought to the fore by the Los Angeles County fires: When is it safe for wildfire survivors to move back into their homes?

After the deadly January 2025 fires, which destroyed more than 16,000 structures, the state Insurance Department estimates that more than 13,000 out of 40,000 claims involved smoke damage.

The fires burned for nearly a month. Debris and emissions contained a mixture of trees, brush and manufactured materials made up of plastics, metals and more — raising concerns about toxic contents left in homes that are still standing but may be dangerous to live in.

Many survivors with homes that did not burn down have yet to return to them 21 months later. Their homes reeked of smoke and they found ash, soot and char inside. They await test results for things such as lead and asbestos. They wait for homes to be repaired, cleaned up and cleared of toxic materials after months of back-and-forth with their insurance companies. Along the way, fire survivors, experts and insurers have all pointed to the lack of standards around smoke damage.

Assembly Bill 1642 will set “a first-in-the-nation standard for testing and remediation,” said Assemblymember John Harabedian , a Pasadena Democrat, about the bill he authored. Remediation is the removal of contaminants or hazards, and fixing possible ill effects.

The bill passed in conjunction with Assembly Bill 1795 , authored by Assemblymember Mike Gipson , a Gardena Democrat. Gipson’s legislation will incorporate the new standards and require insurance companies to abide by them. The governor has until the end of the month to sign both bills; one cannot become law without the other.

“We were hearing from survivors that they weren’t getting a fair shake from their insurance companies,” Harabedian told CalMatters. “Kudos to survivor groups that worked with us on this. We hope others don’t have to go through what they went through.”

The bills are just two of several pieces of legislation to come out of the Eaton and Palisades fires meant to set clearer standards, hold insurers accountable and improve the recovery process after a wildfire.

Smoke damage figures prominently in lawsuits and legal actions against two big insurers in California: State Farm , which insures about 20% of the state’s property insurance market, and the last-resort FAIR Plan . The insurance department has accused both of delaying and denying smoke-damage claims.

Los Angeles County sued State Farm last week, alleging unfair business practices in its handling of claims from the 2025 fires. The lawsuit cited the findings of the insurance department’s investigation, including that the company denied or discouraged requests for environmental testing and refused to reimburse policyholders for testing they paid for themselves. Also among the allegations was that for standing homes, the company sent preferred restoration companies that typically “offered an inadequate and unsafe cleaning method.”

State Farm “strongly disagrees” with the county lawsuit’s characterization of the company’s claims response, said spokesperson Sevag Sarkissian.

Kareem Ali’s Altadena home is one of the few left standing on his cul-de-sac, but he and his wife haven’t been able to move back in.

Instead, they have been living in a donated RV on their property since August.

State Farm paid for them to live in other places from January 2025 until April of this year, when the insurer refused to reimburse them for rent at an $8,000-a-month one-bedroom that it had recommended to Ali. Ali quit paying rent then, and the rent for May, June and July is unpaid.

As for their smoke-damaged home, State Farm denied their request for environmental testing, so they paid $3,000 out of pocket for it. The insurer declined to reimburse them, and has since delayed and denied claims for cleanup. Some of the delays are because the insurer has assigned at least six or seven adjusters to their case, Ali said.

“Every time we got some sort of momentum on our claim, they’d randomly switch,” he said.

So Ali said they spent the money that the company has given them so far for their personal belongings coverage. They hired contractors to clean, remove insulation and replace the carpet. When they told State Farm more repairs are needed but they ran out of money, the insurer denied their claim, he said.

Meanwhile, they’ve continued to pay State Farm their monthly premiums. Ali said he asked their adjuster: “What are we paying for if we’re not going to get coverage?”

Elisa Jacobs Nixon is in the same boat. She and her family haven’t been able to move back into their Altadena home, either, primarily because of months of back-and-forth with State Farm about smoke-damage testing and cleanup.

The insurer initially ignored results of the May 2025 environmental testing she paid $6,000 for herself. So her public adjuster — a private insurance professional who handles claims on behalf of policyholders — advised her to get a contractor’s bid for the work that needed to be done because of the findings. That worked. Within days, State Farm sent its own industrial hygienist, Nixon said.

Both the initial report and the one State Farm ordered had similar findings, including about high levels of contaminants. The most recent test also found asbestos.

Now, even though Nixon and her family remain displaced, things finally seem to be moving forward, she said.

“This has completely hijacked my life, my kids’ lives, it’s just taken over everything,” Nixon said. “That’s why these parameters (in the bills) are so important. My hope is this will spread across the U.S. and help disaster survivors everywhere.”

Under Harabedian’s bill, the Department of Toxic Substances Control would have to create standards for lead and asbestos testing, repair and removal by the end of 2028. By the end of 2029, it would have to establish similar standards for other contaminants, including heavy metals, cyanide and lithium.

Gipson’s bill creates a legal presumption that if ash, soot, char or other combustion byproducts are in a standing home after a wildfire, then smoke damage in the property is the result of wildfire for insurance purposes. Also included in the bill: Insurers must inspect properties within 30 days of claims; would be responsible for the cost of testing needed to restore properties to their pre-loss conditions; and cannot stop paying additional living expenses until properties are restored.

The insurance industry remains “technically opposed to the bills,” said Karen Collins, a vice president at the American Property Casualty Insurance Association and a member of the smoke claims and remediation task force the state’s insurance department formed after the Los Angeles-area fires.

Although Collins said the bills create a framework, she said specific regulations and standards that result should “remain grounded in science.”

That’s why adjuster Brian Haden is skeptical about the bills, which he says lack specifics. He thinks both sides — fire survivors and insurance companies — will use “whatever’s approved as a weapon.”

“Will the (insurance department) enforce this?” Haden said, adding that he foresees litigation will still be the way disputes will get resolved.

Jane Lawton Potelle, founder and executive director of Eaton Fire Residents United, whose data helped inform Harabedian’s bill, acknowledged that the bills won’t necessarily solve all enforcement issues.

She also said that although the bills’ standards won’t take effect in time to help her and her fellow survivors directly, she thinks the fact that standards are coming could still affect lawsuits or possible settlements right now.

“Insurers are relying on people not to know information,” she said. “I want people to know how to protect themselves and stop being afraid. Living in a contaminated home can make you sick. And it can devalue your property.”

State lawmakers also passed legislation that takes aim at insurer behavior. They involve some of the other problems fire survivors mentioned, including long payment delays and insurers’ practice of throwing multiple adjusters at one claim: Senate Bill 876 requires an insurer to assign a primary point of contact for a customer within 30 days of a claim being filed and send a written report to that customer whenever it assigns a third adjuster within six months. It also includes rules requiring insurers to disclose more information: They must submit detailed disaster response plans to the insurance department by April 1, 2028. Those plans would need to be updated every two years or upon the insurance commissioner’s request.

Senate Bill 877 says all preliminary and final calculations related to the amount of loss, covered damage and cost of repairs must be included in claims-related documents insurers provide to their customers within 15 days of a request.

Senate Bill 878 requires insurers to pay the customer the cash value of a property within 30 calendar days of it being deemed a total loss. Subsequently, after receiving proof and documentation, if a policy requires it, insurers must pay the rest of the replacement cost within 30 days. Insurers will owe accrued interest on those amounts if they don’t make payments within 30 days.

This story was originally published by CalMatters and distributed through a partnership with The Associated Press.