Judge Rules California FAIR Plan’s smoke-damage policy is illegal

A Los Angeles County Superior Court Judge said Tuesday, June 24, 2025, that the California FAIR Plan Assn.’s policy violates the insurance code because it provides less coverage than what is required by the state’s Standard Form Fire Insurance Policy.

Since 2017, the plan has required that fire claims must result in “direct physical loss” as defined by “permanent physical changes” to a property, which owners allege has made it more difficult to be compensated for smoke damage.

The FAIR Plan’s handling of smoke damage claims has angered homeowners who say that instead of being promptly offered industrial hygienic testing for toxic substances and professional cleaning services — even after homes were infiltrated by soot, ash and other fire debris — they were told to try to clean up their properties and given lowball offers to close their claims.

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