Judge Rules California FAIR Plan Shortchanged Fire Victims on Smoke Damage

Written By Jon Schibsted

Los Angeles, CA — A Los Angeles County Superior Court judge has ruled that the California FAIR Plan’s smoke damage policy is illegal. The ruling found the FAIR Plan in violation of state insurance law by denying coverage for lab confirmed smoke contamination even when the damage is not visible or detectable by smell. 
Source: San Francisco Chronicle

SSM Has Witnessed This Firsthand

At Safety Services Management (SSM), we have seen the real-life impact of this flawed policy time and again.

“I’ve had numerous people call me crying, desperate for help removing smoke contamination from their homes—many of them telling me their insurance providers offered little to no support under the California FAIR Plan,” said Jon Schibsted, CEO of SSM. “One of our elderly clients was offered less than $3,000 for cleanup, even though her entire neighborhood was destroyed in a wildfire and lab testing revealed heavy contamination throughout her home. It’s just not right and it’s certainly not a ‘Fair Plan.’”

With many residents nearing the end of their temporary housing assistance, families are feeling wronged by their insurance. Some are being pressured to accept settlement offers that are far below the actual cost of professional cleanup, often just so they can return home. This has resulted in individuals and families reoccupying homes that still contain hazardous levels of smoke related toxins without proper remediation.

Alarming Levels of Lead Found in Fire-Damaged Homes

Preliminary testing conducted by SSM has revealed that more than 90% of homes evaluated post-wildfire have high levels of lead dust, often exceeding federal safety standards.

Updated 2024 EPA Dust-Lead Action Levels (DLAL)

In January 2025, the Environmental Protection Agency (EPA) adopted new cleanup thresholds under the Dust Lead Reconsideration Rule. These updated Dust Lead Action Levels (DLAL) are significantly more protective than prior standards and define maximum allowable lead dust levels following remediation:

These new DLAL values are now the benchmark for determining whether a home is safe for re-occupancy following a fire.

As of June 27, 2025, we are proud to report that 100% of SSM clients who received professional remediation followed by post-clearance testing have passed well below these thresholds, with a majority passing at non-detectable levels.

Unfortunately, many residents attempting do-it-yourself cleanups or hiring companies without proper experience do not meet these safety standards. Improper remediation allows toxic urban wildfire byproducts such as lead and soot to remain in porous materials like drywall, furniture, insulation and cabinetry. These contaminants can cause ongoing health risks for months or even years if not addressed properly.

Combustible byproducts entering a home are clearly visible in this scenario; however, many smoke hazards are not as easily detected.

Short-Term Effects Include:

Long-Term Effects Can Include:

Why DIY Cleanup CAN BE Dangerous

Homeowners often turn to DIY methods when insurance coverage is denied but cleaning up fire related contamination without the proper knowledge, equipment, and procedures can actually increase the danger.

Toxins like lead dust, soot, and other fine particulates can become airborne during improper cleaning—especially if surfaces are vacuumed without a proper HEPA filter. These particles can then spread to previously unaffected areas, settle in HVAC systems, or be inhaled during the cleaning. If wet cleaning methods are used before dry cleaning techniques like HEPA vacuuming, contaminants can be driven deeper into building materials. This not only increases long-term exposure risk but also makes future remediation more difficult, more costly and less effective.

Common Mistakes That Increase Exposure Risk:

  • Using a standard vacuum instead of a vacuum with a HEPA filter aerosolize contaminants, redistributing them throughout the home.

  • Wet wiping surfaces before HEPA vacuuming may drive particles like lead and ash deeper into porous surfaces, embedding them further.

  • Failing to seal off contaminated areas during cleaning can allow cross contamination to other rooms or belongings.
    Source: OSHA – Wildfire Cleanup Hazards

CA Insurance Commissioner: Proper Testing Is Required

On March 7, 2025, California Insurance Commissioner Ricardo Lara issued Bulletin 2025‑7, reminding insurers of their legal duty to thoroughly investigate smoke damage claims and to pay for professional testing when contamination is suspected. The bulletin makes clear that it is not reasonable for insurers to deny smoke-related claims without proper investigation or to require policyholders to pay for testing themselves.
Bulletin 2025‑7

In addition, Commissioner Lara has launched a formal investigation into the California FAIR Plan and other insurers accused of improperly denying coverage or cleanup support for wildfire-related smoke damage.
Coverage via AP News

A Step Toward Accountability

The court’s ruling dismantles the “visible damage only” limitation and affirms that lab-based testing is valid evidence of smoke damage.

“I’m glad to see a judge finally holding the FAIR Plan accountable,” said Schibsted. “Homeowners deserve clean, safe homes to return to.”

Meanwhile, many residents are running out of temporary housing insurance coverage and the pressure is building. With nowhere else to go, they’re feeling forced to accept lowball settlement offers from their insurance providers just to move back into homes that may not be fully cleaned or safe. It's unacceptable that families are being placed in this position, forced to choose between health and shelter because insurers aren't offering proper support for full remediation.

What Affected Homeowners Should Do

  • Reopen denied claims based on new testing or health concerns

  • Request insurer to pay for testing and reference Bulletin 2025‑7

  • Use certified professionals to document, clean, and verify remediation

  • Maintain detailed records of all communication, test results, and medical visits

Safety Services Management: A Trusted Industry Leader

Safety Services Management is a national leader in property and vehicle testing, remediation and contamination control. We specialize in identifying and professionally cleaning environments affected by illicit drug residue—including fentanyl, methamphetamine, and other hazardous substances, as well as smoke and fire-related contamination.

SSM operates under the guidance of Certified Industrial Hygienists (CIHs) and trained hazmat professionals. Our team provides on-site testing, thorough documentation and science-based cleanup protocols tailored to meet federal and state health standards.

Whether working on illicit drug cleanups, wildfire restoration, or post-incident contamination assessments, SSM partners closely with property owners, insurance adjusters, and environmental experts to restore safety, protect health, and deliver peace of mind.

Jon Schibsted
Next

Understanding the Hazards of Wildfire Smoke Contamination and How to Restore Your Property