Latest news with #CaliforniaFAIRPlan
San Francisco Chronicle
3 days ago
- Business
- San Francisco Chronicle
California wants regular insurers to grow. But it's the FAIR Plan that's growing faster than ever
A decade ago, the California FAIR Plan was a true insurer of last resort. It insured less than two in every 100 homes in the state. Today, it is one of the largest insurers in California. New data from the FAIR Plan shows the insurers' presence is growing faster than ever before, adding nearly 90,000 new policies in the first half of 2025 alone — a sign that California's insurance crisis remains in full swing, despite tentative signs of progress. Homeowners on the FAIR Plan describe it as unaffordable and inadequate. A base FAIR Plan policy only covers damage from fire, lightning and explosions, requiring policyholders to pay for a separate, second policy to cover burst pipes, liability and anything else. It also caps overall coverage at $3 million per residential policy — enough for most homes, but not at the high end. But for more than 591,000 homeowners, condo owners and renters, there is in essence no other choice. 'The more we grow, it's just indicative of a less stable market. It shows that the market is in an unhealthy state right now, because more and more people are coming to the FAIR Plan,' FAIR Plan President Victoria Roach testified to the Assembly Insurance Committee in May. For Matt Wiser, affording insurance now means deferring repairs on his car and cutting back on the number of trips he makes to the bookstore or to have dinner with his girlfriend. Wiser was forced on to the FAIR Plan last year when his previous insurer, State Farm General, informed him they wouldn't renew his policy unless he'd complete a laundry list of wildfire mitigation measures — including tearing down the shed that's been on the property since Wiser's great-grandfather owned it. The amount of work was overwhelming and unaffordable, and so Wiser set out to find new insurance. He learned from local brokers that no private insurer would write new policies in his ZIP code — a swath of Fresno County that stretches from the relatively flat and grassy part of Auberry, where Wiser lives, deep into Sierra National Forest. Wiser does what he can to reduce his wildfire risk. He regularly mows, weedwhacks and brings in horses and mules to graze grasses that might otherwise fuel a fire. He passes annual inspections from Cal Fire and has a letter from his local fire department testifying to his efforts. Still, because of the overall high risk in his ZIP code, Wiser said no insurance company will send someone out to recognize the work he does. 'It is incredibly maddening, incredibly frustrating. The people who are making those decisions are city folks in air-conditioned offices, and by and large, they've never even been to the areas where they're making these decisions,' he said. 'We are judged by the ZIP code and not individual circumstances.' Now, Wiser is on the FAIR Plan, alongside 277 others in his ZIP code. Since 2019, the FAIR Plan's policy count in his ZIP code has more than doubled, now making up an estimated 47% of all insured residences. If Wiser had done all of the work and kept his State Farm policy, his premium still would have risen by about 60%, he said. But now he's paying about $5,200 a year, 85% higher than he used to, for the FAIR Plan plus a wraparound policy. Data disclosed by the FAIR Plan earlier this month shows that its policyholders pay anywhere from $91 to more than $20,000 per year, but it's not the price that weighs the heaviest on Berkeley hills resident Sharon Drager — it's the coverage limits. Three decades ago, Drager's home burned down in the 1991 Oakland Hills fire, a wind-whipped blaze that destroyed more than 3,000 homes and set a record at the time for the deadliest urban wildfire in California. But through insurance, Drager was eventually able to recover and rebuild. Both the home that burned and the one she rebuilt were insured by State Farm — at least up until last fall, when she was one of nearly 30,000 customers to be told their insurance would not be renewed due to risk of wildfires and fires following earthquakes. (A State Farm spokesperson said the decision to nonrenew thousands of customers was 'not made lightly' and was a necessary step to stabilize the company's financial condition.) Drager searched for a replacement, but no private insurer was willing to give a quote for the full value of her home. So she turned to the non-admitted, or surplus line, market — insurance companies that are not subject to California's pricing regulations. Even when she chose a high deductible, none of the quotes were remotely affordable. 'The numbers were astronomical. One quote was $40,000 a year,' Drager said. 'I had to give up. There was nothing available to me that I could afford.' So Drager wound up on the FAIR Plan, though she fears she is still underinsured. Over the past few years, as insurers cut back on writing new policies and not renewing existing customers, the FAIR Plan has grown faster and faster. Still, its recent growth doesn't mean the insurance crisis is still getting worse — it just means it hasn't yet begun to get better, said David Russell, a professor of insurance at CSU Northridge. While some of the FAIR Plan's growth comes from homeowners like Drager and Wiser who were dropped by their insurers, much of it likely reflects people moving, or purchasing a home for the first time, only to find the FAIR Plan is their only option. Many home insurers have restricted where they'll write new policies, and others — including State Farm and Allstate — have stopped taking on new customers at all. Once homeowners get on the FAIR Plan, it's hard to get off — Roach, the insurer's president, told legislators that in 2023, the average FAIR Plan customer had been with the FAIR Plan for about five-and-a-half years. New regulations, finalized at the end of last year and slated to take full effect soon, aim to get more private insurers to take up customers like Drager and Wiser. These reforms alter the way insurance companies are allowed to set their prices, which align California more closely with the rules in other states, but are also expected to lead to increased prices for many homeowners. In order to use these new regulations, private insurers will have to commit to writing more policies in designated 'distressed' areas — counties and ZIP codes where wildfire risk and the share of FAIR Plan policies is high. Those who already write a significant number of high-risk policies will be required to maintain their presence there. Deputy Insurance Commissioner Michael Soller said the department expects insurance companies to submit their first filings under the new reforms this summer. Part of that will include explicitly telling regulators how many more policies they'll be writing and by when. Throughout the process, Soller said regulators will be keeping a close eye on whether companies are truly writing more policies and where they're writing them. Insurance Commissioner Ricardo Lara has said a key measure of success will be seeing people move off from the FAIR Plan. Some insurers have already begun writing more policies in anticipation, Soller added. Drager is eager for the day a traditional insurer will take her again — but it hasn't come yet. Having rebuilt her home after a wildfire once, she's well aware of how coverage limits that seem high can be quickly eaten up by the costs of debris removal, replacing personal belongings and rebuilding a house from the foundation up — especially in an area like the Berkeley Hills, where construction is expensive. When she first made the switch to the FAIR Plan, the overwhelming anxiety of being underinsured kept her awake at night. Now she has resigned to it. 'I can't fight it,' she said. 'There was nothing personally I could do. My whole neighborhood is affected by this.'
San Francisco Chronicle
6 days ago
- Business
- San Francisco Chronicle
L.A. wildfires broke record for costliest in the history of the planet
The Eaton and Palisades fires in Los Angeles are now the costliest set of wildfires in global history, according to a new insurance industry report. Gallagher Re, a global reinsurance firm, estimates that the January fires caused economic losses of $65 billion, including $40 billion of insured damage. That makes the two blazes the 'costliest individual wildfire events ever recorded for the (re)insurance industry,' according to the report released Wednesday. Reinsurance firms provide insurance to insurance companies in order to handle the costs of major catastrophes, such as large wildfires, and closely track the costs of such events. Measured by structures destroyed — which includes homes as businesses as well as barns and sheds — the Eaton and Palisades fires are the second and third most destructive fires in state history, respectively, according to Cal Fire. Their massive scale of devastation is only outpaced by the 2018 Camp Fire, which destroyed more than 18,800 structures in and around the community of Paradise (Butte County). The Eaton Fire, which killed 18 people, is also the fifth deadliest wildfire in California. The Palisades Fire is the ninth deadliest, with 12 deaths. Though previous fires have burned more structures, the Palisades and Eaton fires uniquely ripped through scores of highly expensive homes. Data from the California Department of Insurance shows that insurance companies, including the California FAIR Plan, have paid out $17.1 billion to customers as of May 12. That number is likely to get much higher as clean up continues and residents return to rebuild. But it's already far outpaced the previous record for costliest wildfire years in California history — 2017 and 2018, when historic fires seasons cost about $12 billion a year in insured losses. The Los Angeles fires prompted renewed attention to the insurance industry and led to scores of lawsuits that accuse insurance companies of illegally colluding to drive up prices and purposefully underinsuring clients. Insurance companies have largely declined to comment on the litigation; industry representatives have refuted such allegations, pointing instead to market forces and a lack of homeowner knowledge. Last month, the California Department of Insurance launched an investigation into State Farm General's claims practices; the insurer said investigators will find it's helped thousands of people to recover. The department also launched a task force to create the first-ever statewide standards for smoke claims in response to homeowners' complaints that insurance companies are denying coverage for testing and proper cleanup of homes sullied by smoke but not burned. California wildfire losses for 2025 could rise further as the state's traditional fire season kicks off. All of that might seem to complicate California officials' efforts to tame the state's ongoing insurance crisis, which first kicked off after the massive blazes of 2017 and 2018. But so far, no insurance company has announced plans to exit the state, stop writing policies or drop existing customers en masse, said Deputy Insurance Commissioner Michael Soller. That's a big departure from historic wildfires of the past, which have prompted insurers like State Farm and Allstate to cut back on their presence in the state and even drove one smaller insurer out of business. Instead, many insurers seem to be waiting for a set of reforms spearheaded by Insurance Commissioner Ricardo Lara set to take full effect this summer. These reforms are widely expected to lead to increased insurance prices, but regulators promise they'll also persuade more insurance companies to write policies in high-fire-risk areas. 'We're still on track for what we expected before these fires,' Soller said.
San Francisco Chronicle
10-07-2025
- Business
- San Francisco Chronicle
Map: Here's how much the California FAIR Plan costs in every ZIP code
For the first time, data released by the California FAIR Plan shows just how much Californians in every ZIP code are paying for coverage from the state's insurer of last resort — numbers that could rise in the future as the insurer's president warns of a substantial rate increase. The new data shows the full range stretches from just $91 a year for one customer in downtown Los Angeles to an average of over $21,000 per year for two homeowners in a high-risk part of San Jose. The statewide average is about $2,800 per year, according to recent state legislative testimony from FAIR Plan President Victoria Roach. The FAIR Plan is a state-created but privately-run insurer designed to offer fire coverage to those who can't find it anywhere on the private market. Over the course of California's insurance crisis, the FAIR Plan has rapidly risen to become one of the largest insurers in the state, now covering approximately 5% of all insured residences. Reforming the FAIR Plan has been one of the major tenets of Insurance Commissioner Ricardo Lara's Sustainable Insurance Strategy, his plan to end California's insurance crisis. Part of that included calling for the FAIR Plan to be more transparent by sharing data on its number of policies and the amount of premium collected across the state by July 1. The Chronicle divided the total number of premiums collected in each ZIP code by the number of policies to calculate an average premium overall. The average premium in the 94563 ZIP code covering Orinda is just under $5,200. Homeowners with the FAIR Plan in the 95441 ZIP code, overlapping Geyserville north of Santa Rosa, pay an average of $11,900 a year. In the 93920 ZIP code along Big Sur, the average FAIR Plan premium is just over $11,000 a year. These averages are greatly impacted by two factors: the wildfire risk of the homes and how much an insurer would be on the hook for if the home was destroyed. That's why some areas, such as the 94074 ZIP code running along the coast of San Mateo County, have high average premiums despite low-risk policies — because the homes themselves are more expensive. You can select a ZIP code to see the average exposure in that ZIP code and the average premium in different risk categories calculated by the FAIR Plan. Premiums are also influenced by other factors, including the deductible a homeowner chooses and any discounts they may get for doing wildfire mitigation work on their home. These premiums in this dataset represent only a portion of what most FAIR Plan policyholders pay for insurance overall. That's because the FAIR Plan only covers damage from fire; to be insured for anything else, from burst pipes to liability payments, policyholders must purchase a second policy from a different insurer. As of 2023, roughly two-thirds of FAIR Plan policy holders also bought one of these secondary policies, according to the Department of Insurance. Four years ago, the average FAIR Plan premium was about $1,800, Roach said at the May hearing — about 50% lower than it is today. Surprisingly, the increase is not because the FAIR Plan has been raising insurer actually hasn't increased its prices since 2023, when rates rose by an average of 15.7%. But it has begun to take on hundreds of thousands of new homes, many of them much more expensive to insure. In 2021, the average coverage limit for a FAIR Plan customer was about $680,000, according to Roach. Today, it is greater than $1 million. Up until 2020, the FAIR Plan capped coverage limits at $1.5 million per home, but now it insures up to $3 million per policy. The FAIR Plan isn't set up to be profitable, but it is mandated to be actuarially sound. That means it should ideally collect enough premiums each year to pay for its operation costs and anticipated claims. For over a year, Roach has been warning that the FAIR Plan's rates aren't high enough to support all of the new customers it's taken on, putting the insurer at risk of running out of money in the event of a large wildfire. That's exactly what happened earlier this year, when claims from the Eaton and Palisades fires quickly overwhelmed the FAIR Plan's limited reserves. The FAIR Plan then turned to its reinsurance, insurance for insurers, and to an infrequently used state statute that allows it to collect money from all of the private insurers in the state to cover the cost of claims. Some of those costs are expected to trickle down to consumers, unless an ongoing lawsuit prevents that. So far, the FAIR Plan has not filed for any new rate increase. A spokesperson for the FAIR Plan said the insurer plans to submit a new filing 'as soon as this year.' Its last residential rate filing was submitted in 2021 as a request for a 48.8% increase, though it was approved in 2023 at just 15.7%. (As part of his quest to get insurance companies to write more policies in the state, Lara has pledged his department will work to process filings more quickly.) Roach said in May that the FAIR Plan's rates are so low it can sometimes be cheaper to sign up for the FAIR Plan than private market insurance, though private insurance policies include more types of coverage and at times higher limits. She said a rate hike would both bolster the FAIR Plan's finances and hopefully motivate some FAIR Plan policyholders to renew their efforts to get back on the private market. 'We are working with the department today to talk about our next dwelling filing to try to get to an actuarially sound rate,' she told the committee. 'The closer we can get to that, the better we're all going to be when that next catastrophe hits.'
Newsweek
02-07-2025
- Business
- Newsweek
California Ruling Could Force Change to Home Insurance Rules
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. A scathing court ruling that found California's fire insurer of last resort in violation of state law for denying policyholders coverage for wildfire-related smoke damage could have major implications for the state's home insurance market, according to experts. On June 24, Los Angeles Superior Court Judge Stuart M. Rice ruled that the California FAIR Plan's smoke-damage policy, which requires smoke damage to be "visible to the unaided human eye" or capable of being "detected by the unaided human nose of an average person" rather than being perceptible "by the subjective senses of [the insured] or by laboratory testing" is unlawful under state law. The decision was taken in response to a lawsuit filed in 2021 by Lake Tahoe homeowner Jay Aliff, whose property was damaged in the Mountain View fire in November 2020. But it could now impact thousands of lawsuits filed since 2017, including claims related to the devastating blazes that ravaged Los Angeles County in January. A man walks through the remains of burned vehicles and homes in Altadena, California, on January 24, 2025. A man walks through the remains of burned vehicles and homes in Altadena, California, on January 24, 2025. ALI MATIN/Middle East Images/AFP via Getty Images How California Insurers Have Approached Smoke Damage Several California homeowners whose homes were not destroyed by fires but significantly damaged by smoke, toxic ash and debris found that their insurers would not pay to cover the clean-up and remediations—all expensive activities. Luis Cazares, whose home in Altadena survived the January fires but was made inhabitable by toxic levels of lead brought in by smoke, discovered the gap in his coverage the hard way. After asking the state's insurer of last resort to help him remove and replace contaminated objects and clean up the property, Cazares received a stark rejection—"Clean it yourself"—and a damage claim payment much below what his coverage would include. Last month, he filed a lawsuit against the FAIR Plan—one of many initiated by wildfire survivors affected by the January blazes. For all of them, last week's court ruling was a victory and a sign that things are changing in a state that seemed to turn a blind eye toward smoke damage. In May, California Department of Insurance Commissioner Ricardo Lara admitted that, for decades, the state had lacked consistent guidelines on how to approach insurance coverage and clean-up of smoke-damaged homes. "The result is confusion, delays and families forced to return to unsafe homes. Consumers are angry and rightly so. Californians deserve better," Lara said, announcing the creation of a task force within the CDI that would recommend "science-based standards, best practices for smoke restoration of homes and personal property, and enforcement tools to the Department that ensure Californians are treated fairly in the wake of wildfire smoke exposure." Judge's Decision It has taken years for a judge to recognize the FAIR Plan's approach to smoke damage as "unlawful," despite years of complaints from policyholders. The lawsuit that triggered the decision is years old and has been fought tooth-and-nail by the state's fire insurer of last resort. "The FAIR Plan filed numerous challenges to the complaint, and because the case was originally filed as a putative class action, there was a battle over class certification, which was eventually denied," Joseph Balice, a California-based attorney working for Haynes Boone Insurance Recovery, a company that helps policyholders recover insurance coverage benefits when carriers deny, delay or underpay claims, told Newsweek. The homeowner, Aliff, moved for summary adjudication—the California state court equivalent of partial summary judgment—in March 2025, and the ruling was issued late last month. "California law requires that homeowners insurance policies provide at least as much coverage as the standard form set forth in California Insurance Code section 2071," Balice said. "In this case, the court found that the FAIR Plan was not providing at least the minimum coverage required because it had limited coverage for smoke damage by imposing additional qualifications and conditions not permitted under the statute." How Ruling Could Change California Insurance Market Aliff's attorney, Dylan Schaffer, described the judge's ruling last week as "the most important decision in California insurance law in decades." Considering likely appeals that may follow the judge's decision, the FAIR Plan is expected to change its policy forms to conform to the court's ruling and potentially pay other claimants whose claims were previously denied under the existing language that was found to be unlawful, Balice said. "Homeowners that have previously had their claims denied based on these unlawful provisions should seek to have their claims re-examined and consider legal action," he urged. "And this decision sets a valuable precedent going forward, and we would expect any insurance company imposing these 'unlawful' restrictions on coverage to revise their policies to remove them and provide the coverage California law requires." FAIR Plan spokeswoman Hilary McLean already said that the insurer is working with California regulators to revise its language around smoke damage. "As the FAIR Plan is in the process of updating its policy language to reflect the manner in which claims have been adjusted since last year, it is unlikely to pursue an appeal," she told the Los Angeles Times. Newsweek contacted the FAIR Plan for comment by email on Wednesday.
Newsweek
02-07-2025
- General
- Newsweek
Californians Are Being Forced To Live In Toxic Homes
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Altadena resident Luis Cazares was among the few lucky homeowners whose property was still standing after the devastating wildfires that ravaged the tie-knight community northeast of downtown L.A. in January were finally extinguished. When he returned home after being evacuated by authorities, "we saw the house standing and I was happy," Cazares told Newsweek. "But I felt guilty that only my house was standing and none of my neighbors were safe." His initial relief turned into dismay when he discovered that his beloved home, which he had bought and improved after years of renting, was covered in toxic lead ash that made it inhabitable—and that insurance would not pay for the cleaning. "The insurance company's failure to do right by him is just devastating for everybody, but in this case, it's just really shameful," Eric Stracener, Cazares' lawyer and a member of the California Fire Victims Law Center, told Newsweek. Cleaning? 'Do It Yourself' When the fires broke out, Cazares was in the process of changing the roof of his home. That means that his property was partially exposed when the fires ravaged the neighborhood—allowing all the soot, ash and debris caused by the blazes to easily get into the property, contaminating everything that survived the flames. On top of that, Cazares believes that the heavy rain that followed the January fires caused its roof to collapse in the weeks following the blazes. "Every time I came to see the house, there was a new chunk of ceiling on the floor," he said. "And so I assumed it was a direct effect from the fire. But the insurance refused to pay," he added. Luis Cazares standing in what is left of his home's patio in Altadena, California. Luis Cazares standing in what is left of his home's patio in Altadena, California. Luis Cazares Cazares' home was covered by the California FAIR Plan—the Golden State's insurer of last resort. The company offers fire insurance to anyone who cannot find it on the private market—a blessing for many homeowners at a time when several insurers have scaled back their presence in the most at-risk areas of the state, even though its coverage is not as extensive as that offered by private carriers. After assessing the damage made by the fires to his home, Cazares made a claim to the California FAIR Plan. Then he waited—for months and months. "They just kept saying, you know, come in two weeks, come in two weeks. Almost four or five months went by until finally they decided to pay me a very little amount, $55,000, and only $7,000 for the damages," Cazares told Newsweek. For Cazares, it was devastating—especially after a contractor had assessed the cost of fixing everything in the house at a total of $250,000. "That's when I say, I need a lawyer here," Cazares said, "because I'm not going to go anywhere with this insurance. They keep refusing to pay, even to clean the house." Before the home started collapsing, Cazares asked his insurer to pay for cleaning the toxic substances in his home. "When I asked the insurance to pay for cleaning they said that, 'you can do it yourself.'" Cazares asked if they would cover the cost of replacing the content of the house, including the contaminated sofas and mattresses, but the FAIR Plan said that if they had not burned, they couldn't give him any money for them. "Test after test have shown that 100 percent of houses in the area have toxic lead contamination," Stracener said. "Also, his insurance limits were $500,000 for the structure. And they paid him $7,000." On May 2, Cazares—with the help of the California Fire Victims Law Center, filed a lawsuit against the California FAIR Plan, alleging bad faith and breach of contract. Newsweek contacted the California FAIR Plan for comment by email on Monday. Growing Anger Against California Insurers Cazares is by far not the only wildfire survivor whose insurance claims seem to have fallen on deaf ears and who are still facing high levels of toxicity inside their fire-ravaged homes. A Pacific Palisades couple, Scott and Lissette Jungwirth, sued the California FAIR Plan in May to force them to turn over claims documents after claiming the company delayed payments to fix their homes. The couple's home, much like Cazares', did not burn during the January wildfires, but it was made inhabitable by the amount of lead, cyanide and heavy metals which was left inside their property by the blazes. While they had to live in hotels, Airbnbs, and family's places for the past months, adding to the distress experienced by their family, the couple is still to receive any payment by the California FAIR Plan. Their lawsuit accused California's fire insurer of last resort of bad faith, breach of contract and other wrongdoing—behaviors that would constitute a violation of the state's customer protection laws. Stracener said the insurer has done about the same with his client, Cazares. "Forty days is the time limit in which they are supposed to have made a final decision on whether or not they're going to honor Luis' claim," Stracener said, explaining how long it took the FAIR Plan to come to a decision on Cazares' claim. "They went way over 40 days. I can't remember the exact date, but I want to say it was close to 80 days." Cazares formally complained against FAIR Plan's behavior, which Eric called "a prime example" of how the insurer is violating policyholders' rights "by stretching out the time, putting more and more stress on the homeowner." This is a tactic used by insurers "to put the homeowner in a desperate enough situation where they will take a diminished amount as opposed to what they are due under the law," he said. "People have given the insurance company weeks and months to do right, and now they're getting final denials," Eric said. "After this amount of time, the insurance companies dragged it out, dragged it out and dragged it down. And fortunately, California has some very favorable consumer laws." Similar litigation has been filed against other California insurers, including State Farm—California biggest homeowner insurer—which is now facing an investigation by state regulators following numerous complaints by policyholders. "Under California law, insurers have to provide their estimate in 40 days. And they're just not doing that," Bryan Aylstock, founding partner of Aylstock Witkin Kreis & Overholtz and a member of the California Fire Victims Law Center, told Newsweek. "We may not have the smoking gun where they're admitting that they're intentionally doing it, but the patterns tell the story. We've seen these patterns over and over again with the endless delays, requiring all sorts of crazy documentation on equipment or personal property that is just burned up," he said. "They're asking for serial numbers on lawn equipment that has disintegrated." Another pattern observed by policyholders, Aylstock said, is "just the utter failure to come in and deal with the smoke and ash and soot that is everywhere, and even do the minimal testing to allow people to safely inhabit their homes." Policyholders affected by the fires are forced to make a "horrible choice," Aylstock said, between putting their families at risk bringing them into their fire-affected homes or waiting for months for insurers to pay them their claims. "Six tons of lead was released just in the Altadena fire, just from the lead paint. And that went somewhere. And sometimes it went, according to the testing, miles away," Aylstock said. "It contaminated houses, and that needs to be cleaned up. There's no safe level of lead, particularly for children, and that can cause developmental delays, all sorts of issues later on. And what we're worried about is losing an entire generation of residents from that area, because people aren't aware or the insurance companies aren't doing what they need to do to make people aware and give them the testing so that they can protect their children," he said. Luis Cazares' home remained standing after the January wildfires ravaged Altadena. But everything inside his home is now contaminated by toxic ash and debris. Luis Cazares' home remained standing after the January wildfires ravaged Altadena. But everything inside his home is now contaminated by toxic ash and debris. Luis Cazares One of the main issues facing Cazares, Stracener and Aylstock is that California insurers currently have no clear obligation when it comes to smoke damage. "For more than 30 years, California has lacked consistent statewide standards for investigating and paying smoke damage claims," said Commissioner Lara in a press release in May addressing the issue. "The result is confusion, delays, and families forced to return to unsafe homes. Consumers are angry and rightly so." To address the issue, Lara announced the creation of a task force that would develop common standards for insurance coverage and clean-up of smoke-damaged homes. While this is a positive step forward for homeowners, it cannot come fast enough for wildfires survivors who've been living in limbo for the past six months. A Lost Homecoming Cazares is currently staying with his brother in Pomona, about an hour from his house. "I moved here because I wasn't sure whether I was going to go back home. And I didn't want to commit a year, which is what most people wanted to rent for, a contract for at least a year," he said. "I've been going to the city and found out that we may be allowed to bring a trailer motorhome to live in there, because rents out here are tremendously high, to be honest. I used to pay $3,000 for my mortgage, and now everywhere is $4,000-$5,000. So I'm anxious to move," he said. The California FAIR Plan, until now, has covered Cazares' rent. "At least they're helping with that part. But it's gonna run out of the coverage and I was told that they will stop paying for my rent," he said. While he is considering moving into his lot with a motorhome, Cazares acknowledges that his former home is not safe to be lived in. "It needs to be repaired or demolished and renewed," he said. However, saying goodbye to his home isn't easy for Cazares, who lived there when his nephew was growing up. "He was probably 5 or 6, and he played a lot of soccer on the weekend. His team loved to come to our house and get into the pool, the patio, we had celebrations most weekends when he was growing up. Now he's 25, and we have all of those good memories in the house." Cazares said he is not asking for the California FAIR Plan to cover the entire amount it will cost to fix his home—only to pay more than what they are now. "It's so bad that I wanna tear it down. I don't think I'm gonna be living in it again," he said. "I think it's a tear down," Stracener said. "Honestly, it would cost more than the insurance policy limits to actually fix it all the way and remediate the toxic damage because every surface is contaminated with lead ash, particularly in Luis's case, because the house wasn't closed." But Stracener is optimistic about Cazares' case against the FAIR Plan. "We feel very strongly that this is a 100 percent related loss under his policy. And we are mystified that they are taking the position that they have taken in this case," he said. "It doesn't make sense. And while what Luis is going through is awful, we feel very confident in his case." There are signs that Cazares—and other wildfire survivors who filed litigation against the California FAIR Plan—may be in a good position to win their case. On Tuesday last week, an L.A. county judge ruled that the California FAIR Plan is illegally underpaying and denying smoke damage claims. The decision, which could impact thousands of lawsuits filed since 2017—including those related to the January wildfires—and could have broader implications for smoke claims for non-FAIR claims, was taken in response to a lawsuit filed by homeowner Jay Aliff, whose home in Lake Tahoe burned in the Mountain View fire of November 2020.
