California Gov. Gavin Newsom signed legislation on Tuesday setting standards for investigating, testing and repairing smoke-damaged homes.
Newsom signed Assembly Bill 1795, the Smoke Damage Restoration Act. The bill, authored by Assemblyman Mike Gipson and sponsored by California Insurance Commissioner Ricardo Lara, presumes that smoke damage within a wildfire-affected area was caused by wildfires.
It also requires insurers to pay for necessary testing and sampling and prohibits insurers from terminating additional living expense benefits until the home is restored and safe for occupancy.
Other tasks include:
- Establish a schedule for inspections and claims processing.
- A restoration estimate is required to restore the home to its pre-loss condition while meeting health and safety standards.
- The policyholder’s right to select a restoration contractor is reserved.
- Establish training requirements for claims adjusters handling smoke damage claims.
- Protect workers performing restoration and restoration activities.
AB 1795 directs the California Department of Insurance and CalOES to assess the challenges posed by smoke damage and develop recommendations to enhance protections for property insurance consumers and communities affected by future pollution events.
The American Property Casualty Insurance Association said the new laws represent “a meaningful step toward clearer guidance on smoke damage claims,” but as regulations develop around the changes, they must be “based on credible science, proven methodologies and the best available technical expertise.”
“APCIA remains committed to working in good faith with policymakers, regulators, consumers and scientific experts to support standards that protect consumers, increase transparency and understanding, and help Californians maintain affordable and available insurance coverage,” said a statistician for the association.
The legislation is the result of an effort led by CDI, wildfire survivors, consumer advocates, public health experts and lawmakers to address what they call gaps in consumer protections.
Smoke damage became a focus of debate in the aftermath of the Los Angeles wildfires in June. Smoke damage claims have become a point of contention among some carriers and consumers. After the Los Angeles fires, Laura established the Smoke Claims and Remediation Task Force, which found deficiencies in smoke damage inspection, testing and recovery rules for wildfire victims.
It’s also dealing with challenges posed by a Lineage Logistics warehouse fire in Boyle Heights in June, whose long-term smoke effects raised questions about insurance coverage. The fire at the 491,000-square-foot building, a refrigerated warehouse, sent large amounts of black smoke into the air in Boyle Heights and the surrounding area.
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