Major Win Against FAIR Plan Over Wildfire Insurance
Major court decision protects homeowners from wildfire insurance gaps
In a major legal victory for California homeowners, a Los Angeles judge has ruled that the California FAIR Plan—the state’s insurer of last resort—has been offering fire policies that fail to meet legal minimum standards. The ruling, from the case Aliff v. California FAIR Plan Association, found that FAIR Plan unlawfully excluded smoke and contamination damage from its fire coverage.
Dylan Schaffer, partner at Kerley Schaffer LLP and lead attorney on the case, said the outcome has far-reaching implications beyond this one policy.
“You cannot carve out from the peril of fire things other than thermal damage. That’s historic. That’s game-changing,” said Schaffer.
The Core of the Legal Challenge
Since 2012, FAIR Plan has tried to redefine fire damage in narrow terms—covering only visible signs like burning, melting, or staining. But wildfires do more than leave scorch marks. They contaminate homes with toxic materials such as beryllium, lead, lithium, and smoke particles, often undetectable to the eye but dangerous to health and home integrity.
FAIR Plan’s attempt to exclude these forms of damage contradicted California law, which mandates fire coverage must include all loss by fire. The judge agreed.
Why This Ruling Matters
The FAIR Plan is composed of all insurers licensed to operate in California. When FAIR Plan’s policy practices are ruled illegal, it sends a message to the broader insurance industry. Many private insurers have adopted similar tactics to deny or minimize wildfire claims.
This decision sets a legal precedent for:
Challenging insurers that underpay or deny smoke contamination claims
Establishing that fire damage includes invisible contaminants
Demanding that insurance companies stop relying on flawed, biased inspections
Protecting homeowners from being forced back into unsafe, unremediated homes
A New Path for Policyholders
According to Schaffer, this ruling is the most important of his legal career. It paves the way for thousands of homeowners across California to re-examine denied or underpaid claims.
He anticipates one of the largest bad faith insurance mass torts in state history, especially in Los Angeles, where hundreds of homes have been affected by extreme wildfire conditions and toxic exposure.
Many policyholders were misled into thinking their homes were “dirty” rather than “damaged”—even when third-party tests revealed dangerous toxins in the air, walls, carpets, and insulation. FAIR Plan repeatedly refused to pay for professional remediation or cleanup.
Legal Protections Going Forward
This ruling follows California’s Supreme Court decision in Another Planet Entertainment v. Vigilant Insurance Co., which clarified that physical damage includes any contamination requiring professional remediation—even if it’s not visible or structural.
Together, these cases reinforce the idea that damage from wildfire doesn’t need to be burned to be real. Insurers who rely on technicalities to avoid payment can now be challenged with greater legal force.
Take Action If You’ve Been Affected
If your FAIR Plan claim was denied, underpaid, or closed without full remediation, you may have a right to compensation. Time is of the essence. As this ruling gains traction, more homeowners will have legal grounds to hold insurers accountable.
Contact Kerley Schaffer LLP to review your case and understand your rights. Our legal team has been at the forefront of this battle for over a decade, and we’re committed to making insurers honor their obligations.