California homeowners sue FAIR Plan over smoke damage coverage
Source: East Bay Times
California homeowners are suing the FAIR Plan, that state’s last option for those needing fire insurance, accusing it of failing to provide the legally required coverage for smoke damage. The class action case, filed Wednesday July 24th, in Alameda County court, is being brought on behalf of the more than 350,000 policyholders on the FAIR Plan – a state-created pool of private insurers required to provide fire coverage to homeowners who can’t find it elsewhere.
Attorney Dylan Schaffer, representing the plaintiffs, said the goal is to force the FAIR Plan to cover the full costs of cleaning homes inundated by smoke during wildfires, a process that can cost tens of thousands of dollars. The lawsuit is seeking required coverage, not monetary damages. In response to complaints of denied smoke claims, the California Department of Insurance determined in a May 2022 report that FAIR Plan policies didn’t meet state coverage requirements. That state insurance department declined to comment on this case and said it would review the complaint. Edan Cassidy, an insurance broker in the Santa Cruz Mountains, said it’s unreasonable to expect that the basic protection offered by the FAIR Plan would cover every type of damage that might be caused by a wildfire. “The FAIR Plan is not a homeowner’s policy,” Cassidy said. He added that FAIR Plan policyholders can buy additional “difference in conditions” insurance to ensure they’re fully covered for smoke damage.
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