California FAIR Plan Insurance & Legal Rights

For many California residents, the California FAIR Plan is a last resort—an insurance option when traditional carriers won’t provide coverage due to wildfire risk. But for thousands of policyholders, including the Jungwirth family in Pacific Palisades, the FAIR Plan has become another source of distress.

After escaping the January 2025 Los Angeles wildfires, the Jungwirths returned to find their home contaminated with toxic soot and ash—rendering it uninhabitable. Despite following all claim procedures, the FAIR Plan:

• Failed to properly inspect their home

• Withheld critical documents

• Denied and underpaid for smoke damage

• Violated California insurance law

Their story is not unique. Kerley Schaffer LLP, along with Edelson PC, is leading litigation to hold the FAIR Plan accountable for bad faith insurance practices and violations of California Insurance Code § 2071.

How the FAIR Plan Is Violating California Law

Withholding Claim Documents in Violation of § 2071

Under California law, homeowners are entitled to access claim-related documents within 15 days of request. These documents include:

• Adjuster photos

• Reports on damages

• Communications about claim evaluations

• Third-party findings used to determine payout

Despite this requirement, the FAIR Plan has consistently refused to share these materials—preventing policyholders from understanding or disputing lowball offers.

Ignoring Court Orders and Regulatory Warnings

In Ortega v. California FAIR Plan, the Fresno Superior Court ruled that withholding claim documents violates the standard fire policy and § 2071. The Department of Insurance (DOI) also warned the FAIR Plan—twice—that its handling of wildfire damage claims was illegal.

Still, the FAIR Plan continues to deny these documents to policyholders across California, including those affected by the 2025 wildfires.

Bad Faith Claim Denials and Delays

The FAIR Plan has also been accused of denying smoke damage claims based on unlawful policy language. In 2017, they changed the definition of “physical damage” to require “permanent physical change,” ignoring:

• Hidden contamination

• Non-visible smoke damage

• Laboratory test results showing toxic exposure

This restrictive definition contradicts California’s standard fire insurance policy, which requires broad coverage of all fire-related damage, including smoke and soot. The FAIR Plan’s continued use of this language has led to widespread denials, delays, and underpayments.

The Impact on Families

Families like the Jungwirths have endured:

• Months in temporary housing due to unsafe living conditions

• Financial strain from out-of-pocket repairs and testing

• Emotional distress caused by uncertainty and displacement

These families paid for peace of mind. Instead, they’ve been left to fight their insurer for the coverage they were promised.

Know Your Rights

If you’re insured by the FAIR Plan and your claim has been delayed, underpaid, or denied:

• Request all claim-related documents in writing, citing Cal. Ins. Code § 2071
  - Document every communication with your insurer
  - Seek legal counsel if your requests are ignored
  - Know you’re not alone—legal action is already underway

Kerley Schaffer LLP is representing wildfire survivors in litigation against the FAIR Plan, aiming to secure both compensation and injunctive relief that forces the Plan to comply with the law.

Legal Help for FAIR Plan Policyholders

Our firm is committed to protecting California homeowners and ensuring insurance companies meet their legal obligations. If you've been affected by wildfire damage and are struggling to get a fair insurance response, we can help.

Contact us to learn more about your rights and legal options.