Two smoke damage relief bills awaiting the governor’s signature address a long-standing issue brought to the forefront by the Los Angeles County fires: When will it be safe for wildfire survivors to return to their homes?
After the deadly January 2025 fires that destroyed more than 16,000 structures, the state Department of Insurance estimates that more than 13,000 of the 40,000 claims were for smoke damage.
The fires raged for almost a month. The debris and emissions contained a mixture of trees, brush and industrial materials consisting of plastics, metals and more, raising concerns about toxic contents remaining in homes that are still standing but could be hazardous to live in.
Many survivors whose homes did not burn have not returned to them 21 months later. Their homes smelled of smoke and ash, soot and charred remains were found inside. They are awaiting test results for substances such as lead and asbestos. They are waiting for the homes to be repaired, cleaned and cleared of toxic materials after months of negotiations with insurance companies. But fire survivors, experts and insurers pointed to a lack of standards for smoke damage.
Assembly Bill 1642 would establish “a first-in-the-nation standard for testing and remediation,” Assemblymember John Harabedian, a Pasadena Democrat, said of the bill he authored. Remediation is the removal of contaminants or hazards and the elimination of possible harmful effects.
The bill was passed along with Assembly Bill 1795, sponsored by Assemblyman Mike Gipson, a Gardena Democrat. The Gipson legislation would include new standards and require insurance companies to comply with them. The governor has until the end of the month to sign both bills; one cannot become law without the other.
“We have heard from survivors that they are not receiving fair compensation from their insurance companies,” Harabedian told CalMatters. “Kudos to the survivor groups who 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 passed in the wake of the Eaton and Palisades fires to set clearer standards, hold insurers accountable and improve the wildfire recovery process.
Smoke damage figures prominently in lawsuits and lawsuits against California’s two major insurers: State Farm, which insures about 20% of the state’s property insurance market, and FAIR Plan of Last Resort. The Insurance Department accused both of delaying and denying smoke damage claims.
Last week, Los Angeles County sued State Farm, accusing it of unfair business practices in its handling of claims related to the 2025 wildfires. The lawsuit cited findings from the insurance department’s investigation, including that the company denied or discouraged requests for environmental testing and refused to reimburse policyholders for testing costs they had paid for themselves. Also among the allegations was that the company referred to preferred restoration companies to restore standing homes, which routinely “provided an inadequate and unsafe method of cleaning.”
State Farm “strongly disagrees” with the characterization of the company’s response to the claims in the district lawsuit, said spokesman Sevag Sarkisyan.
We are standing, but not ready to move in
Kareem Ali’s Altadena home is one of the few remaining on his cul-de-sac, but he and his wife have been unable to move back.
Instead, they have been living in a donated mobile home on their property since August.
State Farm paid for them to live elsewhere from January 2025 until April of this year, when the insurance company refused to reimburse them for rent for an $8,000-a-month studio apartment it had recommended to Ali. Ali then stopped paying rent and the rent for May, June and July remained 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 refused to reimburse them and has since delayed and denied cleanup claims. Some of the delays are because the insurance company has assigned at least six or seven specialists to their case, Ali said.
“Every time our application gained some momentum, they would randomly change,” he said.
So Ali said they used the money the company had given them so far to insure their personal belongings. They hired contractors to clean, remove insulation and replace the carpet. When they told State Farm more repairs were needed but they were out of money, the insurance company denied their claims, he said.
In the meantime, they continue to pay monthly insurance premiums to State Farm. Ali said he asked their adjuster, “What are we paying for if we don’t get coverage?”
Eliza Jacobs Nixon is in the same boat. She and her family were also unable to return to their Altadena home, primarily due to months of disputes with State Farm over smoke damage testing and cleanup.
The insurance company initially ignored the results of environmental tests conducted in May 2025, for which it paid $6,000. So her government auditor — a private insurance specialist who reviews claims on behalf of policyholders — advised her to get a contractor bid for the work that needed to be done because of the results. It worked. A few days later, State Farm sent its own industrial hygienist, Nixon said.
Both the original report and the one commissioned by State Farm contained similar findings, including high levels of contamination. The most recent test also found asbestos.
Now, even though Nixon and her family remain displaced, it appears things are finally moving forward, she said.
“It completely took over my life, my children’s lives, it just took over everything,” Nixon said. “That’s why these parameters (in the bills) are so important. I hope this spreads across the U.S. and helps disaster survivors everywhere.”
What will smoke damage bills do?
Harabedian’s bill would require the Department of Toxic Substances Control to create standards for testing, remediation and removal of lead and asbestos by the end of 2028. By the end of 2029, it will have to set similar standards for other pollutants, including heavy metals, cyanide and lithium.
Gipson’s bill creates a legal presumption that if ash, soot, coal or other combustion byproducts are found in a standing home after a wildfire, then smoke damage to the property is a result of the wildfire for insurance purposes. Also included in the bill: insurers must inspect the property within 30 days of filing a claim; will be responsible for the cost of testing necessary to restore the property to its pre-loss condition; and cannot stop paying additional living expenses until the property is restored.
The insurance industry remains “technically opposed to these bills,” said Karen Collins, vice president of the Real Estate Casualty Insurance Association of America and a member of the state insurance department’s smoke claims and mitigation task force, created after the Los Angeles area fires.
While Collins said the bills provide a framework, she noted that the specific rules and standards that will be created as a result must “remain science-based.”
That’s why regulator Brian Hayden is skeptical of the bills, which he says lack specificity. He believes both sides – fire survivors and insurance companies – will use “anything that is approved as a weapon.”
“Will (the insurance department) enforce this?” Hayden said, adding that he foresees litigation will continue to be the way to resolve disputes.
Jane Lawton Potel, founder and executive director of Eaton Fire Residents United, whose data helped craft Harabedian’s bill, acknowledged that the bills won’t necessarily solve all enforcement problems.
She also said that while the bills’ standards will not take effect in time to directly help her and other survivors, she believes the fact that the standards are taking effect could still impact lawsuits or possible settlements right now.
“Insurers are relying on people not knowing the information,” she said. “I want people to know how to protect themselves and stop being afraid. Living in a dirty home can make you sick. And it can depreciate the value of your property.”
Other notable bills
State lawmakers also passed legislation aimed at cracking down on insurer behavior. They relate to some of the other issues cited by fire survivors, including long payment delays and insurers’ practice of assigning multiple adjusters to a single claim: Senate Bill 876 would require an insurer to designate a primary contact for a customer within 30 days of filing a claim and send that customer a written report 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. These plans will need to be renewed every two years or as requested by the Insurance Commissioner.
Senate Bill 877 states that all preliminary and final estimates regarding the amount of loss, covered damage and cost of repair must be included in the claims documents that insurers provide to their customers within 15 days of the request.
Senate Bill 878 requires insurers to pay a customer the cash value of a property within 30 calendar days of being declared a total loss. Subsequently, upon receipt of evidence and documentation, if required by the policy, insurers must pay the remainder of the replacement cost within 30 days. Insurers will be required to pay accrued interest on these amounts if they do not make payments within 30 days.
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This story was originally published by CalMatters and distributed through a partnership with The Associated Press.