FAIR Plan Still Denying Smoke Damage Despite Court Loss

At Kerley Schaffer LLP, we represent wildfire survivors across California who face unfair treatment from insurers. One of the most troubling examples is the California FAIR Plan, which—despite losing in court—continues to deny smoke damage claims using a standard already declared unlawful.

A Landmark Court Victory for Policyholders

On June 27, 2025, the Los Angeles Superior Court struck down the FAIR Plan’s “sight and smell” requirement, ruling that it violated California’s standard fire insurance policy. That policy requires coverage for “all loss by fire, without distinction between fire and smoke.”

The decision made clear: smoke damage isn’t limited to what the human eye can see or what the nose can detect. Hazardous contamination—such as asbestos, lead, or toxic particulates—can render a home unsafe even without visible or odorous markers.

Our partner Dylan Schaffer called this ruling “the most important decision in California insurance law in decades.” It should have ended a practice that excluded countless legitimate claims.

FAIR Plan’s Continued Denials

Despite the court’s clear ruling—and an enforcement action from California’s Department of Insurance—the FAIR Plan has not abandoned its unlawful standard. Governor Gavin Newsom recently rebuked the insurer in a public letter, calling its actions “unscrupulous and unfair.”

Instead of promptly paying valid claims, the FAIR Plan has delayed or denied coverage, leaving wildfire survivors in limbo while insisting it is merely “updating policy language.”

What This Means for Homeowners

• Legal precedent is on your side. Courts have made it clear: smoke damage must be covered.

• Regulators are watching. Insurance Commissioner Ricardo Lara has taken action against the FAIR Plan for violating consumer protections.

• You don’t have to fight alone. Insurers often count on policyholders giving up in the face of delay and denial. With legal counsel, you can assert your rights.

How Kerley Schaffer Can Help

We are actively representing homeowners whose smoke damage claims were denied by the FAIR Plan and other insurers. If your property was damaged in a wildfire and your insurer refuses to honor your claim, you may have a strong case for recovery under California law.

Contact Kerley Schaffer LLP today for a consultation. Our litigation team has decades of experience holding insurers accountable for bad-faith practices, and we are committed to helping wildfire survivors rebuild.