When the January 2025 firestorm hit Altadena and the Pacific Palisades, not only did homes burn to the ground, but thousands of people were left standing with smoke damage.
The disaster sparked a lawsuit by fire victims who claimed their homes were filled with toxic contaminants, but insurance companies refused to provide sanitary inspections or proper cleaning, refusing to make the homes habitable again.
A long-awaited bill was introduced in Congress this week that would set the nation’s first limits for smoke pollutants, require testing and force insurance companies to restore homes to their original condition.
The bill specifically applies to homes damaged in urban or “wildland-urban interface” fires that occurred in January 2025. In fires, burning structures, cars, public buildings, and other objects produce more toxins than in rural wildfires.
Assembly Bill 1795, authored by Rep. Mike Gipson (D-Carson) and sponsored by Insurance Commissioner Ricardo Lara, follows a similar bill filed by Rep. John Harabedian (D-Pasadena).
The bill would apply to homes, schools, workplaces and their properties and would require insurance companies to meet existing health standards for lead and asbestos removal, while requiring states to develop additional standards for other contaminants.
Mr. Lara’s bill also follows a report released last week by the Haze Control Committee, which he established last year and established the framework for the bill. But the consumer advocacy group said it has a large number of members involved in the insurance industry.
Lara, who has faced calls for his resignation from critics over his handling of the insurance company’s claims operations, defended the task force and its response to the wildfires, noting that his department was investigating the insurance company.
Here’s what you need to know about this bill. The bill still must pass a parliamentary hearing before being voted on in Congress.
Why is this bill a big deal?
Under the current system, insurance companies do not have to pay for expensive sanitary tests to check smoke-damaged homes for toxins. That has caused significant friction with fire victims and spurred ongoing litigation over the issue.
But the bill would require insurance companies to pay for testing for lead, asbestos and other contaminants found in soot, charcoal and ash inside homes after wildfires. Such testing is required both before and after cleaning operations begin to ensure that the home remains in “pre-loss” condition. It also sets deadlines for insurance claims and prohibits insurance companies from suspending payments for temporary housing if a state of emergency is declared until the home is confirmed to be safe.
Who decides what levels of various pollutants are safe?
This bill would require the California Environmental Protection Agency to develop minimum levels of sampling, testing, and chemical screening by June 30, 2027. The requirements would be most stringent in the “high impact” zone, within six miles of the fire, and requirements for residences could be relaxed as you move away from there. Zones and testing requirements can be tailored to specific fires.
The agency is also required to establish training standards and certification requirements for inspectors and others involved in property inspection and restoration.
How will this help victims of the January 2025 fires?
More than 40,000 insurance claims have been filed as a result of the Eaton and Palisades fires, more than 13,000 of which were due to smoke damage.
This bill would allow EPA, state and local agencies to establish rapid “interim” standards. Department of Insurance spokesman Michael Soler said the provision was written with the January 2025 fire in mind.
What are consumer advocates saying?
They usually support the proposed changes. Amy Buck, executive director of United Policyholders of San Francisco, who served on the smoke task force and was critical of its composition, said she was satisfied that the bill “acknowledges the homeowners’ perspective and advances their interests in important ways.” But he expects insurers will complain that the costs are too high and threaten to pull out of the state if the bill isn’t eased.
Dylan Schaefer, an attorney who is suing California Fair Plan, the state’s last insurance company, over haze practices, said the bill is “a very strong nod in the right direction,” but the most important thing would be the state’s final standards for testing and cleanup. “It’s always about the details,” he said.
How has the industry responded?
The insurance industry is expected to lobby for changes to the bill, suggesting it could impose burdensome costs on businesses.
Karen Collins, vice president of the Property Casualty Insurance Association of America, said that while “insurers support science-based approaches to assessing smoke damage and guiding appropriate remediation,” “we want to help ensure the bill strikes a reasonable balance that protects consumers while maintaining insurance affordability, availability, and market stability.”
Rex Frazier, president of the California Individual Insurance Federation, a trade group representing the state’s property and casualty insurance companies, also said the bill lacks an analysis of the “tradeoffs” between the resulting higher claims and the impact on consumer insurance premiums.
He was also concerned that the bill seemed to bypass the traditional rulemaking process and allow state EPAs to enact toxic pollutant and other standards without public hearings.
Soler said the purpose of the bill is to allow the agency to bypass public hearings only to develop interim standards.
