California Governor Gavin Newsom Signs Smoke Damage Recovery Act
California Governor Gavin Newsom signed Assembly Bill 1795, known as the Smoke Damage Recovery Act, to establish standards for investigating, testing, and restoring smoke-damaged homes that survive wildfires. Authored by Assemblymember Mike Gipson and sponsored by California Insurance Commissioner Ricardo Lara, the new law creates a presumption that smoke damage within a wildfire impact area resulted from the wildfire, shifting the evidentiary burden onto insurance carriers.
The legislation addresses a consumer protection gap. Smoke damage claims emerged as a point of contention between homeowners and insurance carriers following the Los Angeles wildfires in June, prompting Commissioner Lara to create the Smoke Claims and Remediation Task Force. That task force found that wildfire victims were falling through the gaps in inspection, testing, and restoration rules. The legislation also responds to prolonged smoke contamination challenges from the Lineage Logistics warehouse fire in Boyle Heights, which burned a 491,000-square-foot cold storage facility and created disputes over insurance coverage for nearby residents.
Insurers Must Meet Deadlines for Property Inspections and Payments
Under AB 1795, insurers must cover the cost of sampling and testing needed to restore a property and clear it for occupancy. If an insurer chooses to inspect a property, it must complete the inspection within 30 calendar days of receiving the claim notice, or within 30 days of gaining access if government restrictions apply. Once inspected, carriers have 30 days to pay the actual cash value of undisputed costs required to restore personal property to its pre-loss condition.
Insurers are also prohibited from terminating Additional Living Expense (ALE) benefits until the damaged home has been restored and cleared for human occupancy under health-based standards. Those standards are tied to companion legislation, AB 1642, authored by Assemblymember John Harabedian and signed on the same day. AB 1795 becomes operative only now that AB 1642 has taken effect, tying living expense protections directly to certified health clearances.
State Agencies Must Develop Certification and Safety Programs by 2029
The statute imposes operational milestones for state agencies and industry participants leading up to 2029. By July 1, 2029, the California Department of Insurance must develop training and certification programs for insurance adjusters and public adjusters handling smoke contamination claims. Adjusters who lack these credentials will be barred from handling such claims. By the same deadline, the Division of Occupational Safety and Health must propose worker safety regulations to protect remediation and restoration employees.
AB 1795 also directs the California Department of Insurance and the California Office of Emergency Services (CalOES) to evaluate challenges posed by smoke contamination and develop recommendations for future contamination events. The Department of Insurance must specifically report on coverage gaps related to events like the Boyle Heights warehouse fire by December 1, 2027.
Industry Response to the Smoke Damage Recovery Act
The American Property Casualty Insurance Association (APCIA) issued a statement regarding the enactment of AB 1795. The association described the legislation as a meaningful step toward clearer guidance on smoke damage claims, while emphasizing that subsequent regulations must remain grounded in credible science, valid methodologies, and the best available technical expertise.
“APCIA remains committed to working in good faith with policymakers, regulators, consumers, and scientific experts to support standards that protect consumers, improve transparency and understanding, and help maintain affordable and available insurance coverage for Californians,” the association stated.
Frequently Asked Questions About California Smoke Claims
What triggers the legal presumption of smoke damage under Assembly Bill 1795?
The law creates a rebuttable presumption that wildfire smoke, ash, soot, char, or combustion byproducts found in a surviving home within any ZIP code partially or fully inside a wildfire impact perimeter came from that fire, requiring insurers to disprove the origin if they deny the claim.
What happens to insurance claims if a home suffers recontamination after initial clearance?
Once a property officially passes health-based clearance standards and is deemed safe for human occupancy, any subsequent smoke recontamination is treated as a new claim subject to a fresh deductible.
How does the law handle temporary living expense payouts during repairs?
Insurers are barred from terminating Additional Living Expense benefits until the affected home has been restored and cleared for human occupancy under health-based standards established by companion bill AB 1642.
“APCIA remains committed to working in good faith with policymakers, regulators, consumers, and scientific experts to support standards that protect consumers, improve transparency and understanding, and help maintain affordable and available insurance coverage for Californians,”